Grincelis v House
[1998] FCA 797
•1 JULY 1998
FEDERAL COURT OF AUSTRALIA
PERSONAL INJURY - appeal from award of damages - nature of assessment - discretion - whether standards ought be derived from other awards
GRATUITOUS CARE - past and future - assessment of need
INTEREST - on award for past care - no statute governing - principles to be applied - evidence necessary - rate to be applied in absence of evidence.
Australian Capital Territory Supreme Court Act 1933 (Cth) - s 53A(2)
Supreme Court Act 1935 (SA) - s 30(c)
Motor Accidents Act 1988 (NSW) - ss 73, 80
Hodges v Frost (1984) 53 ALR 373 - disapproved
Settree v Roberts [1982] 1 NSWLR 649 - not followed
Marsland v Andjelic [No 2] (1993) 32 NSWLR 649 - not followed
Arvind & Anor v Greco (1995) Aust Torts Reports ¶81-357 - not followed
Griffiths v Kerkemeyer(1977) 139 CLR 161 - applied
M.B.P. (S.A.) Pty Limited v Gogic (1991) 171 CLR 657 - applied
Wheeler v Page (1982) 31 SASR 1 - discussed
Cullen v Trappell (1980) 146 CLR 1 - discussed
Gogic v M.B.P. (S.A.) Pty Limited (1990) 53 SASR 394 - discussed
Miller v Jennings (1954) 92 CLR 190 - applied
Gamser v The Nominal Defendant (1976) 136 CLR 145 - referred to
Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601 - referred to
Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118 - referred to and doubted
Project Developments Pty Ltd v Mitchell (1996) 1 VR 213 - referred to
NSW Insurance Ministerial Corporation v Hay (1993) 18 MVR(NSW) 375 - referred to
Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44 - referred to
Van Gervan v Fenton (1992) 175 CLR 327 - approved
Kars v Kars (1996) 187 CLR 354 - cited
Edwards v Australian Capital Territory Schools Authority (Master Hogan, Supreme Court of the Australian Capital Territory, 18 March 1993, unreported) - not followed
Burnicle v Cutelli [1982] 2 NSWLR 26 - not followed
Kelly v John Fairfax & Sons Ltd [1985] 1 NSWLR 462 - not followed
Knight v Smith (NSW Court of Appeal, 9 July 1981, unreported) - not followed
Donnelly v Patrick Operations Pty Ltd (White J, Supreme Court of Queensland, 29 September 1993, unreported) -not followed
G O Tully v G J Coles & Co (White J, Supreme Court of Queensland, 13 October 1993, unreported) - not followed
Bowen v Tutte (1990) Aust Torts Reports ¶81-043 - not followed
Veselinovic v Thorley [1988] 1 Qd R 191 - referred to
Odgaard v Stone [1994] 1 Qd R 408 - referred to
Patorniti v Carter (1997) 25 MVR 429 - referred to
Camm v Salter [1992] 2 Qd R 342 - referred to
Richardson v Ramset Fasteners (Aust) Pty Ltd (Demack J, Supreme Court of Queensland, 11 April 1997, unreported) - referred to
Simpson v Thiess Contractors (Ambrose J, Supreme Court of Queensland, 20 June 1997, unreported) - referred to
Richardson v Schultz (1980) 25 SASR 1 - referred to
Pacini v Cooper (1982) 101 LSJS 166 - referred to
Masinovic v Motor Vehicle Insurance Trust (1986) 42 SASR 161 - referred to
Ruby v Marsh (1975) 132 CLR 642 - referred to
Medlin v State Government Insurance Commission (1995) 182 CLR 1 - referred to
Hines v Commonwealth of Australia (1995) Aust Torts Reports ¶81-338 - not followed
Brown v Hale (1996) 1 Qd R 234 - referred to
Whitaker v Commissioner of Taxation (1998) 153 ALR 334 - referred to
Black v Lipovac (Miles, Heerey & Madgwick JJ, Federal Court of Australia, 4 June 1998, unreported) - explained
Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 - discussed
Sharman v Evans (1977) 138 CLR 563 - discussed
Assessment of Damages for Personal Injury and Death, Professor Harold Luntz, 3rd ed, Butterworths (1990)
ANDREW GRINCELIS by his next friend TADAS GRINCELIS v STEPHEN HOUSE
AG 59 OF 1997
FOSTER, HILL, MATHEWS, KIEFEL & MADGWICK JJ 1 JULY 1998 SYDNEY
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
AG 59 of 1997
ON APPEAL FROM A FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
APPELLANTAND:
STEPHEN HOUSE
RESPONDENTJUDGES:
FOSTER, HILL, MATHEWS, KIEFEL & MADGWICK JJ
DATE OF ORDER:
1 JULY 1998
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
The whole of the judgment of the Full Court of the Supreme Court of the Australian Capital Territory given on 11 July 1997 be set aside and in lieu thereof there be judgment for the appellant in the sum of $4,524,910 together with the costs of the appeal and cross-appeal to that Court.
The respondent pay the appellant’s costs of this appeal and the cross-appeal.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
AG 59 of 1997
ON APPEAL FROM A FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
APPELLANTAND:
STEPHEN HOUSE
RESPONDENT
JUDGES:
FOSTER, HILL, MATHEWS, KIEFEL & MADGWICK JJ
DATE:
1 JULY 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
FOSTER J: I agree, in general, with the reasons for judgment of Hill and Kiefel JJ. However, I wish to add the following remarks in relation to the awarding of interest for past care.
I agree with Higgins J that the passage from the judgment of Kirby J in Hodges v Frost (1984) 53 ALR 373 at 381-2 is obiter. Accordingly, Hodges cannot be regarded as having authoritatively stated that, as a matter of law, in actions brought in the Australian Capital Territory, no interest was payable in respect of awards for past care. However, Kirby J was following Settree v Roberts [1982] 1 NSWLR 649, a decision of the New South Wales Supreme Court of Appeal, which stood unchallenged for ten years until being overruled by a majority in Marsland v Andjelic [No 2] (1993) 32 NSWLR 649. Arguably, Settree could still be followed in the Australian Capital Territory. However, notwithstanding the strong dissenting judgment of Mahoney JA in Marsland, I consider that the reasoning of the majority (Kirby P, Meagher JA) should be followed. In the later case of Arvind & Anor v Greco (1995) Aust Torts Reports ¶81-357, Mahoney JA accepted that Settree had been effectively overruled by the previous decision. In these circumstances Settree should no longer be followed despite its correctness having been acknowledged by way of obiter comment in Hodges. Accordingly, I accept that interest may properly be awarded on Griffiths v Kerkemeyer (1977) 139 CLR 161 damages for past care. The question remains, however, what is the appropriate rate of interest to be applied and how is the calculation to be made? In particular, should a commercial rate of interest be applied?
In the Full Court of the Supreme Court, the majority, following Hodges, declined to award interest in respect of past care. Higgins J, in dissent, following Marsland, having accepted, on the basis of unchallenged evidence, that the appropriate total award for past care should be $670,088, awarded interest on that sum in the amount of $233,190. He indicated that this figure was the figure calculated by the plaintiff and “not challenged as being appropriate if interest was to be ... allowed”. It appears that this figure had been arrived at by applying half the commercial rate of interest, accepted as being 12 per cent, to the total sum for a period of 5.8 years that being the time elapsing from the date of discharge of the plaintiff from hospital after the accident until the date of trial, 9 October 1995. It must be noted that this could only be described as a fairly arbitrary method of calculation. However, the parties were prepared to accept it in the Full Court, the major contest there being whether interest should be allowed at all. Before this Court, however, the amount awarded has been challenged as excessive and there has been a contest as to whether commercial rates of interest are appropriate in relation to past Griffiths v Kerkemeyer awards. In this context, it is necessary to consider the decisions in Marsland and Arvind in light of the decision of the High Court of Australia in M.B.P. (S.A.) Pty Limited v Gogic (1991) 171 CLR 657.
The latter case did not involve a Griffiths v Kerkemeyer award. It involved an award in respect of pre-trial pain and suffering. The High Court decided that the appropriate rate of interest to be applied to the award was 4 per cent. It is necessary to consider in some detail the Court’s reasoning, in order to determine whether it should apply, not only in respect of awards for pre-trial non-economic loss, but also to awards for past gratuitous care.
In Gogic the High Court had before it two applications. The first was for special leave to appeal, in an action for personal injuries, against a judgment for the plaintiff entered in the Supreme Court of South Australia in the sum of $107,776 comprising an award of damages for $85,776 and interest of $22,000. The ground of the application was that interest on damages for pre-trial pain and suffering had been wrongly awarded at a commercial rate of interest. This rate of interest had been applied by the trial judge as a result of an answer received by him to a question in a case stated to the Full Court of the Supreme Court of South Australia. The second application to the High Court was for special leave to appeal from the judgment of the Full Court on the case stated. Because jurisdictional problems were involved in the latter application, the High Court decided to hear the original application, which involved no jurisdictional problem. In the result the Court upheld the application for leave from the judgment of the Supreme Court and allowed the appeal from that judgment. It dismissed the application for special leave from the judgment of the Full Court. However, in determining the first application, it necessarily had regard to the reasons of the Full Court in its provision of the answer on the case stated.
In South Australia, as in the Australian Capital Territory, the Supreme Court was given power by statute to award interest in a judgment for damages for personal injury (s 30(c) Supreme Court Act 1935 (SA)). The rate of interest was a matter for the Court’s discretion. In the case of Wheeler v Page (1982) 31 SASR 1 the Full Court of the Supreme Court of South Australia had held that interest on damages for pre-trial economic loss should be assessed, in exercise of this statutory power, at the prevailing market rate or rates of interest applicable in the period in respect of which the interest was awarded. However, it was held that interest for pre-trial pain and suffering should be assessed at a lower rate. The High Court referred to the relevant passage from the judgment of King CJ, which it is appropriate to repeat here:-
“Todorovic v. Waller ((1982) 31 S.A.S.R. 1) has given authoritative judicial recognition to the fact that a substantial portion of currently prevailing rates of interest merely compensates the investor for the diminution which inflation works on the value of the principal sum. It seems to me that these legal developments require a reconsideration of the practice as to the rates of interest used in computing the interest to be included in judgments.
... Damages for pain, suffering and loss of the amenities of life sustained before trial, are assessed at trial on the basis of the value of money at the date
of the assessment. There is no need to compensate the plaintiff for diminution in the value of money. Current interest rates, to the extent that they compensate for such diminution, are not appropriate to compensate the plaintiff for being kept out of his money. This would be achieved by using a rate which represents the difference between the prevailing rate for secure investments and the rate of inflation.”
It was held in this case that the appropriate rate for “pre-trial non-economic detriment” was 4 per cent per annum. It appears that, in arriving at this interest rate, the Full Court did not consider an earlier judgment of the High Court in Cullen v Trappell (1980) 146 CLR 1, in which it had been held that, where it was appropriate to make a dissection of an award of general damages into an amount to compensate for past pain and suffering and loss of amenities and an amount to cover such loss in the future, then interest on the award for the past should be “allowed at ordinary commercial rates”. Because of this aspect of the decision in Cullen v Trappell, the Full Court of the Supreme Court of South Australia in Gogic v M.B.P. (S.A.) Pty Limited (1990) 53 SASR 394 felt constrained, in answering the question in the case stated, to overrule the previous decision of the Full Court in Wheeler v Page and direct that the award of interest should be at ordinary commercial rates. The trial court applied this ruling, thus producing the figure for interest referred to above. In giving the ruling of the Full Court, King CJ said (at 397):-
“The decision of Cullen v. Trappell on the point in question has stood undisturbed for 10 years and it is incumbent on this Court to give effect to it. This Court should therefore no longer follow Wheeler v. Page but should apply Cullen v. Trappell.”
The Court indicated, however, that it regarded this aspect of the decision in Cullen v Trappell as being unconvincing and based upon fallacious reasoning.
It was in these circumstances that the matter came before the High Court for a decision as to whether, in relation to past non-economic loss, the rate of interest to be applied to an award of damages should be based on ordinary commercial rates for the period in question or upon some lesser rate. The High Court held that it was inappropriate to apply a commercial rate of interest. Their Honours (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron, McHugh JJ) said (at 663):-
“With great respect to the judgment of Gibbs J. in Cullen v. Trappell, although it is a fallacy to refuse to award any interest on the ground that the verdict contains a built-in inflationary factor, it is equally fallacious to hold that a plaintiff will be properly compensated for the delay in obtaining damages for pre-trial pain and suffering only if the award of damages contains an amount for interest calculated at the commercial rate or rates. The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period: Batchelor v. Burke (1981) 148 C.L.R. 448, at p. 455 per Gibbs C.J. But the loss or detriment which a plaintiff suffers by being kept out of his or her damages for pre-trial pain and suffering cannot be equated with the amount which those damages, invested at the commercial rate of interest, could have earned during the relevant pre-trial period. The determinants of rates of interest have been the subject of much dispute among economists. But it cannot be denied that during periods of significant inflation, such as those which have existed in Australia during the last twenty-five years, commercial rates of interest reflect a component to compensate a lender for the decline, by reason of inflation, in the real value of the principal which occurs during the period of the loan: see the comments, for example, in Hawkins v. Lindsley (1974) 49 A.L.J.R. 5, at pp 6-7; 4 A.L.R. 697, at p. 699; Sharman v. Evans (1977) 138 C.L.R. 563, at p 588; Todorovic v. Waller, (1981) 150 C.L.R., at pp 429, 448. Damages for pre-trial non-economic loss, however, are assessed in accordance with the value of money as at the time of the award. In no way is any loss which a plaintiff incurs by reason of being deprived of his or her damages for pre-trial non-economic loss brought about by inflationary factors. In those circumstances, to award interest on damages for non-economic loss during the pre-trial period by reference to commercial rates is to compensate the plaintiff for a ‘loss’ which he or she has not sustained.
No doubt whatever interest rate is used to compensate a plaintiff, it can be at best only a rough guide as to the value of the plaintiff's loss during the period when he or she was deprived of the use of his or her money. Nevertheless, to award interest at commercial rates for periods of pre-trial pain and suffering appears to be a breach of the principle that a plaintiff in a personal injuries action should not receive a sum for general damages greater than the ‘sum which, so far as money can do so, will put him in the same position as he would have been in if ... the tort had not been committed’: Butler v. Egg and Egg Pulp Marketing Board (1966) 114 C.L.R. 185, at p 191. The proposition that, during periods of inflation, interest on pre-trial non-economic loss ought to be calculated at commercial rates, therefore, is erroneous in principle. On this point, Cullen v. Trappell should no longer be regarded as authoritative.”
Later in the judgment the Court gave consideration to the utility of accepting a 4 per cent interest rate as opposed to an interest rate arrived at as a result of careful calculation of “the real interest rate” to be arrived at by deducting the inflationary component from the prevailing commercial rate. On this topic their Honours said (at 666):-
“The question remains, however, whether it is not fairer to the parties to use a formula which applies the real rate or rates of interest applicable in the relevant period rather than a fixed figure such as the 4 per cent figure selected in Wheeler v. Page. This could be done, for example, by taking the commercial rate or the ten-year bond rate and deducting a figure for inflation. This approach has the advantage of focusing on the real interest rate which would have been available to a plaintiff for the purpose of investment during the period that the plaintiff was kept out of his or her money. But it tends to assume - erroneously - that the purpose of the award of interest is to compensate a plaintiff for being deprived of the opportunity to invest his or her money. A plaintiff is awarded interest because he or she has been deprived of the use of his or her money, not because he or she has foregone investment opportunities. It would be wrong, for example, to refuse to award a plaintiff interest simply because the real rate of interest during the relevant period was zero or a negative figure. Moreover, to award interest calculated by reference to the real rate of interest, when it has been a positive figure, ignores the important fact that the return to the real-life investor from his or her investment is diminished by income tax on both the inflationary and real profit components of that return. Thus, the use of the real rate of interest figure as the measure of a plaintiff’s loss in being deprived of his or her damages for pre-trial pain and suffering does not seem inherently superior to the use of a fixed figure.” [Emphasis added]
Their Honours went on to say that although the selection of the 4 per cent figure was somewhat arbitrary, it was appropriate to use it. Their Honours said (at 666):-
“In the circumstances, the use of the 4 per cent figure seems to us to be more likely to achieve fair and reasonable compensation for plaintiffs than the use of the real rate of interest figure - which may result at times in a plaintiff obtaining no or little interest and at other times an amount of interest greater than the return which could be achieved by real-life investors on a comparable sum after the incidence of income tax.”
As I see it, the fundamental question, so far as this aspect of the present appeal is concerned, is whether this reasoning should be applied to the awarding of interest in respect of Griffiths v Kerkemeyer awards for past gratuitous care. Specifically, should it be applied, in the present case, to the award of $670,088 which is accepted as the correct award for compensation for the plaintiff’s past need for gratuitous services to date of trial.
In the first instance it needs to be noted that the reasoning in Gogic proceeds on the basis that the amount awarded for pre-trial pain and suffering is “assessed in accordance with the value of money as at the time of the award”. Although the relevant pain and suffering has been incurred by the plaintiff over the period since the cause of action accrued until the date of trial, which may be a span of some years, the amount attributed as damages for this period is an amount of dollars bearing the dollar-value at the date of award. No attempt is made, although such an attempt might be possible, in the case of, say, a span of five years, to attribute a separate award of damages to each year of the five year period, such awards being made in the money value of each individual period. If this approach were adopted in relation to the assessment of pre-trial general damages, then it would be appropriate, arguably, to apply a suitable rate of interest to each of the component annual awards. As those awards would not have been made in the dollars of the trial date, an argument might be mounted that, in order properly to compensate the plaintiff, an amount of interest should be applied to each of the annual figures which would take into account inflationary factors, as these annual figures would not have the same in-built inflationary factor as a lump sum awarded in the dollars of the date of trial to compensate for the entire period. In practice, awards of pre-trial general damages are not calculated by the totalling of amounts allocated to particular periods in the past, such amounts being awarded in the terms of the dollar-value of those periods. However, in relation to awards based upon the need for past gratuitous services, it is quite common, especially if the time span is of reasonable duration, to calculate the amounts needed to satisfy those needs at appropriate commercial rates, for specific consecutive periods which reflect changes in those rates and then to total the amounts so arrived at in order to achieve the final figure for damages under this head. A figure so arrived at is, of course, not a figure properly to be described as being in “the dollars of the day”. It reflects the changing dollar-values over the period of the calculation. Consequently, as I shall demonstrate later, the reasoning in Gogic cannot be directly transposed to the Griffiths v Kerkemeyer situation.
Does this mean, however, that, where the total sum awarded in respect of need for past gratuitous services is calculated by a totalling of amounts for past periods, the individual amounts entering into this total should individually bear a commercial rate of interest for the purpose of arriving at the full amount to be awarded to the plaintiff?
These considerations are of importance in the present case because the base figure for compensation for past gratuitous services has been arrived at by calculating, in accordance with appropriate award rates, the cost of supplying the relevant needs in the periods to which the particular award rates applied. When an increase in appropriate award rates occurred, a fresh calculation was made for the period in which that rate applied. At time of trial the total amount for compensation for these needs was arrived at by totalling the amounts for the individual periods. The situation was, therefore, not the same as the award made for past pain and suffering to date of trial which was, of course, made in the dollar-value of the day of trial. Is it the position, nevertheless, that a Gogic non-inflationary rate of interest should be applied rather than a rate or rates of interest which represent the commercial rates of interest applicable during these periods? It is clear that such a calculation would properly take into account fluctuations in the commercial rates of interest in periods defined by fluctuations in award rates. This would be a very precise undertaking and might very well run counter to the concept that an award of damages can be no more than a reasonable attempt to compensate a plaintiff for injury and loss and does not truly admit of precise quantification. Griffiths v Kerkemeyer damages are, after all, not special damages. They partake much more of the character of general damages.
In this context it is necessary to consider the two decisions of the New South Wales Court of Appeal to which reference has already been made. In each of these cases, interest at commercial rates was allowed in respect of the notional cost at award rates for past gratuitous care. Higgins J, in his dissenting judgment in the present case, relied upon these judgments in making his award of interest. It must be remembered, of course, that the question before the Full Court was, basically, whether interest should be awarded at all, having regard to Hodges. Higgins J, having decided that it was appropriate that interest be awarded, did so, on the basis of what was an agreed figure calculated with reference to commercial rates, in the manner already indicated.
Marsland was a case decided under the provision of the Motor Accidents Act 1988 (NSW) which, inter alia, “capped” the amount which could be awarded in any case, for damages under the heading of “non-economic loss”. This statutory category did not include losses of the Griffiths v Kerkemeyer type. A major question in the case was whether Gogic should apply to limit the rate of interest applicable to the award of damages for pre-trial non‑economic loss (which concept covered pain and suffering, and loss of amenities of life), in circumstances where, in the opinion of the majority, in the absence of the statutory “cap” a far higher award would have been made. In the majority judgment (Kirby P and Meagher JA) the question was dealt with as follows:-
“The next contentious aspect of non-economic loss is whether the principle enunciated by the High Court in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 should apply to it. At least since Ruby v Marsh (1975) 132 CLR 642 it must be regarded as well-established that general damages are awarded in an unrestricted manner in the money value of the time of the judgment, not the time of injury. What MBP (SA) Pty Ltd v Gogic establishes is that, since the Ruby v Marsh principle contains a built-in inflationary factor, it would be a conceptual absurdity to award full interest on general damages as so awarded. In our view that reasoning can have no application in cases like the present, where the amount awarded for ‘non-economic loss’ can hardly be said to be ascertained in terms of the money value of the time of judgment, but is subject to an arbitrary and artificial statutory limit.”
It is clear, however, that this reasoning was not intended by the Court to apply to the award for past voluntary services. This award was not subject to any statutory limit. Accordingly, what their Honours said about the approach to interest in relation to this latter head of damage must be regarded as having been intended to be of universal application. Higgins J was of this view and I agree with him. Their Honours, as already indicated, overruled Settree with the result that it was no longer the case that no interest could be awarded in respect of these damages. Their Honours then continued (at 653-4):-
“If the plaintiff is to be enabled to reimburse, in full, the provider of services which have an economic value to the plaintiff, then interest computed in the ordinary way must be allowed on the amount awarded. The distinction from medical (and other) out-of-pockets is readily drawn. The cost, the sum to be paid to a medical practitioner, is fixed at the time the services were provided. It does not increase with time. However, in respect of voluntary domestic services, if, as the High Court mandates, compensation is to be given at full commercial rates then payment to the provider of the services, if it is to be made, would be made at present rates and not at the rate which prevailed when the service was provided. Compensation is, however, usually awarded at the commercial rate.
Logically therefore, the plaintiff, in respect of past voluntary services, should be entitled to either (a) compensation at the rate prevailing when the service was provided, together with interest in full from the time of provision whether the service was paid for or not; or (b) such compensation at the present gross cost of each service, whether paid for or not.”
I accept that their Honours are indicating that where past voluntary services have been provided, then the need for those services should be compensated for by damages calculated in accordance with the appropriate commercial rates, relating to the period when the service was provided, together with interest on each such amount “in full from the time of provision”. Although it does not appear precisely from the judgement, it seems that “interest in full” means interest at appropriate commercial rates. That this is so, appears clearly enough from the subsequent decision of the Court in Arvind.
By the time Arvind was decided the New South Wales legislature had altered the law in relation to payment of interest in accordance with the principles enunciated in Marsland. Leave to appeal was granted by the High Court from the decision in Marsland but, because of the alteration in the legislation, the question of interest on damages in respect of the provision of gratuitous services was excluded from the grant of leave. Accordingly, this question has not yet been considered by the High Court. As already indicated, however, I am satisfied that, in accordance with the reasoning in Marsland, as accepted in Arvind, interest may be awarded in respect of damages for past gratuitous services. I also agree with Higgins J that the reasoning in Gogic, in the passage already cited, would require that interest be so awarded. However, the question remains whether such interest should be awarded at commercial rates as has been accepted in Marsland and Arvind.
In Arvind Mahoney JA conceded that his adherence to Settree could no longer be maintained. He indicated, however, that the question still remained as to how interest on the Griffiths v Kerkemeyer component of damages should be calculated. In this connection his Honour made the following observations (at 62,623):-
“A Griffiths v Kerkemeyer award is made, not for an amount paid by the plaintiff to another person. It is an amount payable by the defendant to the plaintiff because the defendant has created in the plaintiff a need for the relevant services. If interest is to be paid upon a Griffiths v Kerkemeyer amount, it is to be paid because such a need was created by (as is ordinarily the case) the injury done to the plaintiff at the time of the accident. It is, in principle, arguable that, if the need for services is created at the time of the accident and if interest is to be paid at all by reason of the creation of that need, interest should be paid upon the total amount payable to compensate for that need from the time when the need was created, namely, the date of the accident.
The alternative view is based upon the fact that the amount payable is calculated by a summation of the weekly or other periodic sums which notionally the plaintiff would have had to pay to a third party to procure those services from time to time. In this case, it is possible to calculate notionally what would have to be paid for such services each week. The suggested approach assumes the sum payable to have accrued period by period and that the award is to be a summation of the periodic amounts notionally so calculated. Interest is calculated by reference to the notional periodic amounts in the manner referred to in the judgment of Meagher JA.”
His Honour said that, in his view, the basis suggested by Meagher JA should be followed. Clarke JA agreed.
Meagher JA, having indicated that the plaintiff had obtained a verdict in negligence including a component for past care which extended over a period of 10.3 years, noted that the trial judge had “calculated a precise figure for each of the nearly 11 years”, the total amount not being in dispute. His Honour continued (at 62,624):-
“However, what is in dispute is the interest allowable on that sum. It is not in dispute that some interest is allowable. This court decided that in Marsland v Andjelic (No 2) (1993) 32 NSWLR 649. Nor is it in dispute that the rate of interest should be a commercial rate. Not is it in dispute that the rate of 15% selected by the learned trial judge is a proper commercial rate.
The figure for interest at which his Honour arrived was $178,560. It can be demonstrated mathematically how that result was reached. His Honour took 15% of $114,137 and multiplied that figure by 10.43.”
His Honour accepted that this was an invalid approach as it involved:-
“... inter alia, awarding nearly 11 years interest on the value of the services provided the year before the trial (or, to put the matter another way, giving interest at 150% for that year).”
His Honour then stated what he held to be the correct approach. He said “In principle , interest on past care should run from the dates when the care was provided, or the need for care arose, whatever the case may be”. His Honour then made calculations for each of the relevant periods and amounts , which calculations resulted in a substantially lower figure than that arrived at by the trial judge using the disapproved method.
It will be observed that it was accepted in these judgments, expressly in Arvind and implicitly in Marsland, that it was appropriate to apply commercial rates of interest in making the required calculations. It was, apparently, not contested by the parties that this was the correct approach to the award of interest. Accordingly, the Court of Appeal, on each occasion, was not required to consider whether some other rate would be appropriate. In particular, it would appear, no argument was directed to the Court that it should apply the approach in Gogic. It will be remembered that in Marsland, the majority declined to apply the Gogic principles to the component of the damages award relating to pre-trial general damages for pain and suffering and the like. This was on the basis that the existence of the statutory cap on such damages rendered inapplicable the principles discussed in Gogic. However, no consideration was given to whether such principles should apply to the awarding of interest in respect of the Griffiths v Kerkemeyer component for past care. It would appear that the Court was not asked to consider this question. Nor was it in Arvind, where it was undisputed that commercial rates should apply. Also, in Arvind there was no dispute that the commercial rate of 15% should be selected, although, no doubt, commercial rates of interest fluctuated in the ordinary way over the period of 10.43 years in which pre-trial gratuitous care was provided. In other words, if a precisely accurate calculation had been sought in Arvind it would have been necessary to have regard to the established commercial rate of interest in respect of each of the relevant annual periods. Such calculations are not infrequently provided by way of actuarial evidence. The general comment can, however, be made that such calculations are capable of producing a spurious appearance of exactitude in an area of discretionary judgment. The important question, as I see it, is whether it is appropriate at all, to use commercial rates of interest as a guide to arriving at a proper award of damages to compensate an injured person for the past need for gratuitous services.
In my view, it is appropriate to apply the principles enunciated in Gogic to past Griffiths v Kerkemeyer damages. The application cannot, however, be directly made. As is emphasised in Gogic the component of the award for general damages attributable to the pre-trial period is made in currency bearing the value of the date of trial. In those circumstances, to apply a rate of interest which takes account of inflationary factors was wholly inappropriate. However, in the Griffiths v Kerkemeyer situation it is quite common, as in this case, for the total basic award to be comprised of specific amounts for consecutive past periods each of which was calculated in accordance with industrial awards or market rates of pay appropriate to those periods. Insofar as this was the basis of calculation, the total thus arrived at cannot be said to be payable in the money of the day of trial. To this extent, Gogic cannot have direct binding force in the Griffiths v Kerkemeyer situation. However, this does not mean, in my view, that commercial rates of interest should be applied to the component sums for past periods.
In the first place, although Griffiths v Kerkemeyer awards are not, generally speaking, subsumed under the heading of general damages, they are, in my opinion, far more akin to such damages than they are to special damages. They are computed on the basis of notional amounts paid in the past for services notionally provided at commercial rates of pay. Of their very nature they do not involve actual out of pocket expenditure productive of an unpaid debt in respect of which interest would be payable at commercial rates in order that the capital sum not be eroded by inflation.
Although Gogic makes it clear that the question can no longer be approached, as in Settree, on the basis that no interest should be awarded, it provides, in my opinion, sound reasons for not applying commercial rates. The purpose of awarding interest on a Griffiths v Kerkemeyer sum is not “to compensate a plaintiff for being deprived of the opportunity to invest his or her money”, the notional monies involved in the Griffiths v Kerkemeyer damages having been notionally paid away at the time when the notional services were provided. The plaintiff has not “foregone investment opportunities”. Consequently, the award of interest should be made on the basis that “he or she has been deprived of the use of his or her money” (Gogic at 666).
If exactitude were sought in an area where, having regard to the numerous imponderables involved, it could not reasonably be an object of attainment, then efforts might be made to arrive at the “real” rate of interest for each appropriate period. I consider, however, that the broad approach enjoined by Gogic in respect of general damages is also appropriate in the present situation. I consider that the 4 per cent interest rate taken as appropriate in Gogic for general damages may also reasonably be applied in respect of Griffiths v Kerkemeyer damages for past notional care.
However, to apply this rate directly to the total sum of $670,088 would be to produce the fallacious result exposed in Arvind. It could, of course, be applied in respect of each period identified in the schedule of notional payments for past services as was done in Arvind. However, this would assume, without evidentiary justification, that 4 per cent was the appropriate rate in each of those periods. We have been asked by the parties to make a final decision in this matter rather than send it back for re-calculation on the basis of further evidence as to the “real” rate of interest applicable from time to time. In these circumstances, I consider that the approach taken by the majority should be adopted in the present case, namely, to apply 2 per cent interest to the whole figure for the total period of 5.8 years, even though the whole figure is not expressed, as in general damages, in money value at date of trial. This, indeed, is equivalent to the approach taken by Higgins J except that his Honour took a commercial rate of 12 per cent and then halved it before applying it to the total amount for the whole of the period. The present approach takes 4 per cent, accepted as the current “real” rate of interest, and then halves it and applies it in the same way.
I agree that to make this approach to calculation the equivalent in all respects of the Gogic approach to general damages, it would be necessary to express the basic Griffiths v Kerkemeyer award in the money value at date of trial. However, in the present case, in view of the parties’ request, this method adopted will suffice.
I agree with the orders proposed in the judgment of Hill and Kiefel JJ.
I certify that this and the preceding thirteen (13) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster.
Associate:
Dated: 1 July 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
AG 59 of 1997
ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
APPELLANTAND:
STEPHEN HOUSE
RESPONDENT
JUDGES:
FOSTER, HILL, MATHEWS, KIEFEL AND MADGWICK JJ
DATE:
1 JULY 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
HILL and KIEFEL JJ: This is an appeal from a decision of a Full Court of the Supreme Court of the Australian Capital Territory given on 11 July 1997 in an appeal brought by the respondent from a decision of a Master given in December 1995. The Master had awarded damages for personal injury to the appellant in the sum of $4,240,646.60. A majority of the Full Court (Gallop and Ryan JJ) allowed the respondent’s appeal and varied the amount awarded by reducing it to $3,867,097.00. They also dismissed a cross-appeal which sought to increase the amount awarded to the appellant. Costs on both the appeal and cross-appeal were awarded against the appellant.
It is convenient to set out in brief form the background to this appeal. A number of the facts referred to will need to be considered in greater detail in later parts of these reasons. The appellant received the injuries, in respect of which he sued, on 15 February 1989. He was then a 39 year old solicitor, a partner in a small legal firm. He was in good health except that he suffered from diabetes which he was able to control by an appropriate medical regime. On that day he was struck by a motor vehicle driven negligently by the respondent. He sustained a closed head injury and multiple fractures affecting his spine, left shoulder, right forearm, right ankle and right lower leg. He was hospitalised, remaining in a coma for about 6 weeks. He suffered significant brain damage and later developed post-traumatic epilepsy. He suffered further orthopaedic injuries in a subsequent accident causally related to the effects of the first. These injuries were themselves severe and painful requiring hospitalisation and surgical intervention. At time of trial before the Master the orthopaedic injuries had largely resolved but the brain damage had led to severe and general cognitive deterioration, poor memory and diminished intellectual performance. He was no longer capable of working as a solicitor and was not capable of any gainful employment. He required extensive daily care and supervision which would be ongoing.
Liability was admitted. The Master assessed damages as follows:-
General Damages 240,000 Interest 13,550 Past treatment 181,501 Future treatment 52,000 Past income loss 250,000 Interest 100,000 Future income loss 500,000 Superannuation benefits 75,000 Past services 250,000 Additional carer’s accommodation 90,000 Cost of future care 2,000,000 Worker’s compensation insurance 120,000 Nursing supervision 47,000 Handyman 23,000 Holidays 50,000 Taxis 75,000 $4,067,051 Administration Costs $173,596 $4,240,646
In the appeal to the Full Court the respondent contested the amounts awarded by the Master under several of these heads of damage on the grounds that they were excessive, against the evidence and the weight of the evidence and were disproportionate to the injuries sustained. In his cross-appeal the appellant asserted that the Master had erred in failing to assess damages for past and future care on the same basis and in failing to award interest in respect of the damages for past care. The majority allowed the appeal in respect of the awards for general damages, past and future earnings and superannuation. They dismissed appeals in respect of the awards for future care, holidays and travelling expenses, nursing supervision and handyman assistance. Higgins J, dissenting, would have dismissed the appeal on all the claims without disturbing the Master’s awards. He would have allowed the cross-appeal with respect to past care and interest on the past care award.
By his appeal to this Court the appellant seeks, in effect, the restoration of the Master’s awards for general damages, past economic loss and interest thereon, future economic loss and superannuation benefits. He sought also that the amount awarded by the Master and confirmed by the majority of the Full Court, in respect of past gratuitous services be varied by substituting therefor the amount awarded by Higgins J in his dissenting judgment, it being submitted that his Honour’s approach was correct in principle. It was also sought that an appropriate award of interest should be made in respect of the award for past gratuitous services, it being asserted that the failure of the Master and the majority to award interest was wrong in principle.
The respondent has brought a cross-appeal claiming that the amount awarded by the Master, undisturbed by the Full Court, in respect of future care of the plaintiff was excessive.
We shall consider the appeal and cross-appeal by reference to the heads of damage which have become the subject of dispute.
GENERAL DAMAGES
This head of damage incorporates the components of pain and suffering and the loss of the amenities and of the enjoyment of life.
That the appellant’s case was one of serious damage, with consequential impact upon him, was accepted by the Master and was not doubted by the Full Court of the Supreme Court. Their Honours in the majority however viewed the question as one of degree. In determining that the Master’s award of $240,000 for this head of damages ought to be reduced to $180,000, their Honours said:
“Approaching the matter that way and having regard to all the findings and facts made by the Master, we are of the view that the award from general damages was excessive in all the circumstances. The plaintiff is not a paraplegic or quadriplegic. Admittedly he has serious brain damage, but, in our opinion, his disability cannot be regarded in the most serious category of cases. It is apparent from the transcript that the plaintiff answered questions responsively and cogently both in evidence and in cross examination which lasted from 10.30 am to 3.46 pm less adjournment. Indeed it is difficult to discern any intellectual disability from the transcript of his evidence.”
Higgins J however concluded that the appellant’s injuries were severe and that, even without the disabilities present in cases of paraplegia or quadriplegia, it might deserve inclusion in the most serious category of case, and his Honour did not consider it appropriate to interfere with the award. The majority, Gallop and Ryan JJ, went on:
“We agree with Higgins J that brain damage with multiple consequence may well be perceived as being serious, but we are unable to agree with his conclusion that the discretion of the Master did not miscarry in awarding the sum of $240,000. We would reduce the award for general damages to $180,000. …”
It may be observed that their Honours considered the award given to be referrable only to the most serious category of injury and disability resulting in pain and suffering, and that the appellant’s case did not fall into that category. It appears that their Honours were at least confirmed in that view by their reading of the evidence of the appellant and their assessment of the apparent manner in which it was given. Their Honours did not, of course, have the advantage of observing the plaintiff. The transcript can be but a poor guide to the nature or extent of the appellant’s disability as revealed in the witness box. The significant evidence relevant to the assessment of this head of damage, is that accepted by the Master. This included the uncontested medical evidence of Dr Sutton. Dr Sutton explained that, whilst the appellant retained sufficient cognitive processes to enable him to function at a basic level, the real impact of the deterioration in his intellectual and memory processes was in his inability to take in new information, to make “executive” decisions and to plan and organise. His deterioration in these areas was to such a level that his independence was seriously compromised.
Miller v Jennings (1954) 92 CLR 190, 195-6 holds that in the assessment of damages such as these, what is involved is more akin to the exercise of discretion than an ordinary decision. There will be much room then for individual choice. It is not sufficient for an appellate court to have a different preference. By reason of the nature of the assessment, that court should be satisfied that there has been some misapprehension of the facts or the application of some wrong principle, such that it could be concluded that there has been a wholly erroneous estimate and that (at 196):
“The scale must go down heavily against the figure attacked if the appellate Court is to interfere, whether on the ground of excess or insufficiency.”
(See also Gamser v The Nominal Defendant (1976) 136 CLR 145, 148-9). In Davies v Powell Duffryn Associated Collieries Ltd [1942] AC 601, 616-7, which was cited with approval in Miller v Jennings, it was also pointed out that damages for pain and suffering are at the other end of the spectrum from those which may be determined more objectively, and comprise in large part matters of impression and common sense.
The Full Court did not point to any error in the Master’s assessment save for the conclusion as to the degree of severity which ought to be accorded the effects from which the appellant suffers. That is the very exercise of judgment that ought not to be displaced on account of a difference of opinion and without error being disclosed. Whilst we are of the view that the sum awarded for pain and suffering was high, error cannot be taken on that account to have occurred. There was sufficient evidence in our view to enable the Master to conclude that it was a very serious case, as the award made makes clear. The brain damage suffered by the appellant was described as “severe and permanent” and involving frontal lobe syndrome, epilepsy and grossly impaired intellectual functioning. Other effects included facial palsy, some impairment in speech and hearing, abnormality of gait, impaired co-ordination and difficulties of visuo-spacial analysis, left-sided weakness, impairment of the fine motor skills, attentional deficit, impairment of memory and of concentration and left-sided double vision as well as the features described by Dr Sutton and referred to above. Witnesses spoke of the appellant presenting now as an old man, and he is prone to the onset of further deterioration in his intellectual processes. The appellant was hospitalised for a lengthy period. He had to learn again the most basic skills. He was said to have suffered from aggression, anxiety and frustration and although the Master did not accept that he suffered from depression, such that it could be considered a psychiatric illness, it would appear that he accepted that the appellant suffered some form of depression. The appellant has lost a professional life, and is now intellectually capable merely of undertaking clerical tasks under supervision. A life which involved travel, a social life and a number of interests outside his profession has been lost to him and he will continue to be reliant upon others, as he is now, to undertake tasks as simple as shopping because of his inability to comprehend the monetary transaction involved. He will need supervision and assistance with respect to his epilepsy and diabetes.
The Master did not elaborate upon the question of the appellant’s degree of insight. This can be taken to be of some importance in assessments of this nature and the extent of the award, in our view, must be taken to reflect a view that it was considerable. Whilst the evidence suggested the appellant lacked some insight into his diminished abilities and intellectual processes, there was sufficient evidence otherwise to support a conclusion that he was well aware of what he had lost. In any event the award was not challenged on this basis.
In our view it has not been shown that the Master’s award went beyond the bounds of a proper exercise of a sound discretion: see Planet Fisheries Pty Ltd v La Rosa (1968) 119 CLR 118 and there is no basis for interfering with it. We should add that that case holds (124-5) that there is no norm or standard with respect to assessments of damage which may be derived from other cases and applied to the facts of another, and that the “proportionality” required is as between the award made and the facts in a given case. Different views may be held concerning the practicability of such an approach (applied: Project Developments Pty Ltd v Mitchell (1996) 1 VR 213; doubted: NSW Insurance Ministerial Corporation v Hay (1993) 18 MVR (NSW) 375, 377). It would seem that the High Court might now countenance the possibility of a Court obtaining some assistance from the size of other awards in personal injury cases (Carson v John Fairfax & Sons Ltd (1993) 178 CLR 44). The question does not arise in this case and we need not consider it further.
LOSS OF EARNINGS: PAST AND FUTURE
The Master’s award for loss of earnings to the date of trial ($250,000) was based upon the premise that the appellant could have earned $750 net per week. The majority in the Full Court held that the evidence did not support such a finding and substituted an award of $150,000. Their Honours based that award upon what was considered to have been established as the actual earnings of the plaintiff as at the date of the accident, $402 per week net.
A difficulty in the evidence was presented by the lack of records of the partnership. The appellant had contributed some funds and was entitled to, and presumably did, draw upon its earnings. They could not however be established. A figure of $400 was put to each of the appellant and the partner’s wife, Mrs Nelson, as the sum he might have drawn on a weekly basis, but neither could recall whether that was so.
The evidence was therefore inconclusive as to the amount in fact earned by the appellant at the time. There was some evidence of what was said to solicitors employed by the practice after the appellant was injured and unable to work. The evidence was that one of them was paid $402 net per week, which is of course the sum referred to in the Full Court. The evidence suggests this may have been the amount paid as at the date of hearing, although it seems low in comparison with other evidence. In any event there was no evidence that the employed solicitor in question was comparable, in experience and ability, to the appellant. The evidence which bore most directly upon what the appellant might be paid by another firm was given by a former employer Mr Bell, who produced a list of salaries. He described them, in their application to the appellant, to be “conservative”, by which he meant that the appellant was more experienced than persons who might be paid those salaries and could have commanded more.
There are two other matters relevant to the question of loss of earnings and earning capacity which require mention. The Master found that because the appellant’s partner’s wife would have herself become qualified to practise as a solicitor in the year or so following the accident, it was unlikely that the partnership would have continued with the appellant as a partner. It could not sustain three partners. The question was, then, what path the appellant would have followed. There was some evidence that the appellant had, at some point, considered working as a solicitor in the public service. He may have earned more if that were the case than the other salaries referred to in evidence. The Master however held that he would likely have continued in private practice for the greater part of his career.
The Master calculated the award for the loss of earnings to the date of trial on the basis of a loss of $750.00 net per week, discounting the $265,714 then reflected to $250,000, for contingencies. The figures for salary supplied by Mr Bell, whose evidence the Master accepted as indicative of the appellant’s earning capacity, were used by actuaries to calculate total past loss of earnings. Although the Master did not state the source of the $750 used by him in his own calculations, it equates generally with the figures supplied by Mr Bell.
The figures just mentioned refer to the appellant’s earning capacity in private practice, but not in the partnership. The only adjustment which may, in our view, have been required was an allowance for his earnings whilst he remained in the partnership until Mrs Nelson qualified. His actual earnings were not established, as we have pointed out, but there is a real prospect that they were less than the sum supplied by Mr Bell. The period in question is not great, some 16 months, and would not significantly affect the total sum. Given that the Master has already discounted it, and made no allowance for the prospect that the appellant may have earned more, given his experience, we do not consider any adjustment is necessary. The base sum utilised by the Master to calculate loss of earnings from the date of trial, $800, is little more than the figure used for past loss and is reflected in the figures supplied by Mr Bell as salaries currently payable. No error was otherwise pointed to in the calculation for future loss.
It follows, in our view, that the awards for loss of earnings were justified.
GRATUITOUS CARE: PAST AND FUTURE
The appellant’s contention with respect to the amount allowed for past care was that the Master distinguished between the appellant’s past and future need for services, when there was no warrant for doing so.
The Master assessed the appellant’s future need for care on the basis that full time supervision, such as that presently provided by the appellant’s parents, was necessary in addition to housekeeping and some nursing services. We shall deal with the question as to the correctness of that approach later in these reasons. For present purposes we are concerned only with whether the appellant’s need for care to date of trial, provided largely by his parents, should be treated differently.
The Master considered, on the one hand, that it would be wrong to make calculations based on the provision of expert nursing care for 24 hours a day but, on the other, that it would also be wrong to do so on the basis that they were involved in the provision of them for only 3 hours a day. The Master then observed that the appellant’s particulars of claim, which were calculated on award rates and on the same basis as those he accepted for the future, yielded an annual figure of over $100,000 per annum. The total figure for the period in question was $733,719. It was conceded in the appeal that that figure was incorrect and that it should be $670,088. The Master however concluded that he did not think that sum could be justified on the evidence, and went on:
“The past is different from his future. Even had his parents played no part in his actual care, it must be borne in mind that care would have been provided to him while he was living in their home with them. That will not be the situation in the future”.
As a matter of discretion, as the Master put it, he awarded $250,000 for past care. The Full Court of the Supreme Court upheld that assessment, holding that the difference between it and what was allowed for the future lay in the levels of care provided by the parents and that which will be required after the appellant begins living independently of them. With respect, save for the extra cost involved in the housekeeper and carers living in, which we take to be reflected in the awards, we cannot see how the appellant’s needs or their value could be different. To this we add that the Master did not allow for a greater need in the earlier period, when the appellant returned from hospital, although he observed that the services provided by the parents were then likely greater. The appellant does not however seek a separate assessment of them.
It is clear from Van Gervan v Fenton (1992) 175 CLR 327 that the process to be undertaken is an assessment of the injured person’s need for care and services, which is then valued by reference to commercial rates charged for its provision, regardless as to whether they were in fact provided gratuitously, by relatives or partners (see also Kars v Kars (1996) 187 CLR 354). It follows that, unless there be shown some basis for differentiating between the extent of the need, or what was necessary to fulfil it, the calculation for past and present care must be the same. In this case once the appellant’s injuries stabilised the need remained the same, save that in the future it may increase somewhat should his intellectual processes further deteriorate. The cost of care likewise remains the same. It has however been calculated to include, with respect to both the past and future costs, live-in components referrable to carers. One would not think this ought to be applied to the cost of the parents’ care, since they resided with the appellant in any event. Such an approach would not however be consistent with Van Gervan. The appellant’s need was for full time care and the commercial value of it, which is the exercise to be undertaken, includes a live-in allowance. In our respectful view the only basis apparent from the Master’s reasons for what is a very substantial reduction in the award for this head was a concern that the cost of the parents’ services appeared to be too much. The evidence however required such a conclusion. It follows, in our view, that the award must be increased by the sum of $420,088 ($670,088 less the $250,000 awarded).
The respondent’s appeal to the Full Court of the Supreme Court did not include, as a ground, the Master’s assessment of the services necessary to meet the appellant’s need for care in the future. The respondent however argued on this appeal that the Master’s lower assessment for past services, at some $37,000 per annum, ought consistently be applied to the future. In principle the submission is correct, but it also involves an assertion that the sum provided for was an accurate assessment of what was reasonably to be provided and its cost. That question impacts upon both the assessment for past and for future care. The latter was assessed by the Master at $2,000,000 and it is the evidentiary basis for that assessment which will determine the question here raised by the respondent.
There was, in our view, ample evidence to support the need assessed by the Master for future care. It involved the provision of continuous supervision by a companion/housekeeper during weekdays, with relief carers who would reside with the appellant over the weekend. The fees for these persons were calculated by reference to award rates with necessary allowances. There was, as the appellant conceded, an element of duplication in the calculation for an additional relief carer to be provided when the housekeeper was taking holidays, given that other carers were also provided for weekends over the whole year. The additional cost, some $78 per week, would require a reduction of about $100,000 from the total sum reflected in the relevant schedule $2,561,000. Since the Master has already discounted it to $2,000,000, we do not think that further adjustment is warranted.
There was some evidence that supervision, to this extent, was not necessary and that the appellant could live alone with general guidance being provided by a mentor. It was rejected by the Master however for the reasons that it did not take account of the appellant’s condition of epilepsy, the doctor, who gave the opinions, had not observed the appellant in his own home, as the occupational therapist Mrs Chamberlain had, and it did not accord with Dr Sutton’s opinion concerning the appellant’s level of dependence. Similar views, expressed by doctors called by the respondent, were discounted by the process of examination. Dr Sutton, upon whose evidence the Master placed considerable reliance, observed that the appellant had 24 hour control from his parents “in terms of supervision, structure and knowledge of his whereabouts and movements” and that future care required that those structures be maintained if further deterioration of the appellant’s condition were to be avoided. Dr Sutton’s evidence was not challenged by the respondent. Dr Wilson, whose evidence was also accepted by the Master, had explained that the level of brain damage suffered by the appellant meant that he could not do any of the tasks necessary to keep his diabetes under control and that there could easily and quickly develop serious problems. The Master concluded “basically, as Dr Wilson expressed it, the plaintiff needs the equivalent of a parent to look after him.” In submissions the respondent made much of the level of independence that the appellant apparently had, which was said to be seen by his ability to undertake outings from his house unaccompanied. The concluding remarks of Dr Sutton, set out in the Master’s reasons, we consider put the matter in perspective:
“…it is important when determining future outcomes with those suffering the extent and type of dysfunctions such as Mr Grincelis possess, not to be fooled by his current level of “independence”: this is only occurring under highly structured conditions and those changes noted above, namely a deterioration in his work, social, cognitive and emotional status, are likely to occur if this structure is not present and as a function of the passage of time.”
A figure of $2,000,000 for the cost of future services is a very high one, even over a 30 year period. The respondent invited the Court to reduce it on that account but it would not be proper to do so having regard to the state of the evidence. The medical evidence clearly supported a finding of a need for constant supervision. The only evidence before the Master of the cost of meeting that need was the schedule provided by the appellant based upon award rates. If there were some other, less expensive but reasonable way of meeting the need, it was not put into evidence.
INTEREST ON THE AWARD FOR PAST CARE
Both the Master and the majority of the Court below concluded that no interest should be allowed on so much of the award for damages as related to past care. In so doing the Master followed his own decision in Edwards v Australian Capital Territory Schools Authority (18 March 1993, unreported). He, like the Court below, treated the decision of this Court in Hodges v Frost (1984) 53 ALR 373 as, to use the language of the Full Court, having “authoritatively resolved” the question adversely to the plaintiff.
The principal judgment in Hodges v Frost was delivered by Kirby J (then a judge of this Court), with whom Gallop and Morling JJ agreed. At 381-2 his Honour said:
“It now seems clear that interest is not payable on the component of the verdict calculated under this head of damages. Glass JA has explained this rule on the ground that the plaintiff, not being out of pocket, cannot claim interest any more than he could claim such interest on unpaid medical accounts: see Glass JA in Burnicle v Cutelli [1982] 2 NSWLR 26 at 30, applying Settree v Roberts [1982] 1 NSWLR 649.”
However, as his Honour observed shortly thereafter, the provisions of s 53A(2) of the Australian Capital TerritorySupreme Court Act 1933 (Cth), as amended, which authorised the award of interest pre-judgment to a successful plaintiff, commenced on a date later than the date on which the proceedings in that case were commenced and in consequence no interest was payable. In these circumstances it is correct to say, as Higgins J, who dissented on this point, said that the decision in Hodges v Frost so far as it related to proceedings instituted after s 53A(2) commenced, was dicta, unnecessary to the decision.
The leading judgment of the Court of Appeal in Settree v Roberts was delivered by Hutley JA, with whose judgment Hope JA agreed. The principle applied is the same as that emanating from Glass JA in Burnicle v Cutelli [1982] 2 NSWLR 26, namely that an entitlement to interest would arise only where the plaintiff is out of pocket in respect of demands upon him for which he or she is entitled to compensation. No challenge in either case was made to interest being charged in respect of an award of general damages, notwithstanding that that component of damages likewise does not necessarily depend upon the plaintiff outlaying any money.
In the meantime Settree v Roberts has been followed, inter alia, in: Kelly v John Fairfax & Sons Ltd [1985] 1 NSWLR 462; Burnicle v Cutelli, supra Knight v Smith (9 July 1981, NSW Court of Appeal, unreported). Hodges v Frost has also been followed in the following cases in jurisdictions other than the Australian Capital Territory and New South Wales: Donnelly v Patrick Operations Pty Ltd (White J, Supreme Court of Queensland, 29 September 1993, unreported); G O Tully v G J Coles & Co (White J, Supreme Court of Queensland, 13 October 1993, unreported); Bowen v Tutte (1990) Aust Torts Reports ¶81-043.
Other cases such as: Veselinovic v Thorley [1988] 1 Qd R 191; Odgaard v Stone [1994] 1 Qd R 408; Patorniti v Carter (1997) 25 MVR 429; Camm v Salter [1992] 2 Qd R 342; Richardson v Ramset Fasteners (Aust) Pty Ltd (Demack J, Supreme Court of Queensland, 11 April 1997, unreported); Simpson v Thiess Contractors (Ambrose J, Supreme Court of Queensland, 20 June 1997, unreported) have accepted that interest should be awarded on damages for past care without specifically referring to Hodges v Frost.
After Hodges v Frost was decided the High Court decided MBP (SA) Proprietary Limited v Gogic (1991) 171 CLR 657. The issue in that case was a different one. Interest had been awarded by the Supreme Court of South Australia on the award of damages for non-economic loss sustained before the trial. That Court had applied, not the commercial interest rate then payable, but a rate of four per cent being the difference between the prevailing rate for secure investments and the rate of inflation. The question was whether it was correct to calculate the interest on the basis of the somewhat arbitrary rate of four per cent.
The decision is important not only because it authorised the acceptance of a less than a commercial rate of interest for pre-judgment interest, but because the unanimous court comprising Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ stated the basis for the award of such interest. At 663 their Honours, after rejecting an argument that because the verdict had built into it an inflationary factor it was wrong, in principle, to award interest at all (an argument, in effect repeated in the present case, because the award for past care was made on present day values and so took into account inflation) said:
“The function of an award of interest is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period... But the loss or detriment which a plaintiff suffers by being kept out of his or her damages for pre-trial pain and suffering cannot be equated with the amount which those damages, invested at the commercial rate of interest, could have earned during the relevant pre-trial period.... Damages for pre-trial non economic loss, however, are assessed in accordance with the value of money as at the time of the award. In no way is any loss which a plaintiff incurs by reason of being deprived of his or her damages for pre-trial non-economic loss brought about by inflationary factors. In those circumstances, to award interest on damages for non-economic loss during the pre-trial period by reference to commercial rates is to compensate the plaintiff for a “loss” which he or she has not sustained.”
Not only are general damages, like damages for past care, calculated on current day values, but each is calculated without reference to any outlay which a plaintiff may have to make. In these circumstances it is hard to see, as a matter of principle, how the calculation of damages for past care, which are calculated without reference to outgoings incurred by the plaintiff, should proceed differently.
The next significant development was the decision of the NSW Court of Appeal in Marsland v Andjelic (No 2) (1993) 32 NSWLR 649. It should immediately be observed that in New South Wales the provisions of the Motor Accidents Act 1988 (“the 1988 Act”) had been enacted which, inter alia, affected the award of interest (cf s 73). The Court of Appeal, of which Kirby P (as his Honour had by then become) was a member, was of the view that interest should be calculated on non-economic loss, defined in the legislation, but subject to a ceiling imposed by s 80 of the 1988 Act. The Court refused to follow the actual decision in Gogic on the basis that the reasoning had no application where the amount awarded was subject to an artificial ceiling or limit (see at 653 in the joint judgment of Kirby P and Meagher JA). The judgment then turned its attention to interest for past care and determined that Settree v Roberts should be overruled, because, so it was said, the analogy with unpaid medical expenses was “beguilingly simple...illogical and erroneous.” The majority noted that the decision in Settree had not commended itself to other courts. Reference was made to Richardson v Schultz (1980) 25 SASR 1; Pacini v Cooper (1982) 101 LSJS 166, Veselinovic v Thorley, supra and Masinovic v Motor Vehicle Insurance Trust (1986) 42 SASR 161. None of the cases cited depended upon any statutory provision, other than the general power of the Court to award interest. It is noted also that the case was regarded by Professor Harold Luntz in his Assessment of Damages, 3rd ed (1990) at 488 as having been wrongly decided.
The reasoning adopted by the Court of Appeal in rejecting the distinction between past care and unpaid medical accounts is dealt with in the following passage at 653-4, which provides a subsidiary argument for the respondent:
“We are moved to accept Mr Morrisson’s argument that the principle of Griffiths v Kerkemeyer does not require any actual expenditure by the plaintiff as long as the need is one which would ordinarily be productive of economic loss. It should be entirely irrelevant whether the provider has actually sustained an economic loss by payment. If the plaintiff is to be enabled to reimburse, in full, the provider of services which have an economic value to the plaintiff, then interest computed in the ordinary way must be allowed on the amount awarded. The distinction from medical (and other) out-of-pockets is readily drawn. The cost, the sum to be paid to a medical practitioner, is fixed at the time the services were provided. It does not increase with time. However, in respect of voluntary domestic services if, as the High Court mandates, compensation is to be given at full commercial rates then payment to the provider of the services, if it is to be made, would be made at present rates and not at the rate which prevailed when the service was provided. Compensation is, however, usually awarded at the commercial rate.
Logically therefore, the plaintiff, in respect of past voluntary services, should be entitled to either (a) compensation at the rate prevailing when the service was provided, together with interest in full from the time of provision whether the service was paid for or not; or (b) such compensation at the present gross cost of each service, whether paid for or not.”
Mahoney JA dissented. In his Honour’s view the conceptual basis for interest, as stated by the High Court in Ruby v Marsh (1975) 132 CLR 642, namely that the entitlement to damages accrued at the date of injury (or the accrual of the cause of action) and so interest should accrue from that date, because the plaintiff had been kept out of the damages to which he or she was entitled was overcome by the 1988 Act, at least in respect of damages for past care, and thus no interest should be awarded.
Two observations can be made. Reflected in the judgment is the suggestion, not explicit in Griffiths v Kerkemeyer (1977) 139 CLR 161, that the award for past damages might be handed over to the carer who actually may have done the work. While such a principle might well be regarded as fair and just, it does not seem to reflect the law. It also overlooks the point made by McHugh J in Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 18 that “Griffiths [v Kerkemeyer] and Van Gervan [v Fenton] formulate a principle for compensation for a need” for services and do not require that the need “is or may be productive of financial loss” [emphasis added]. Second, the majority, in any event, was able to disregard the policy basis for the award for interest, as not long before enunciated in Gogic, in the passage cited above, because of the statutory context in which the case was decided.
Marsland v Andjelic (No 2) has not been the subject of any direct criticism. It has been followed in New South Wales in Hines v Commonwealth of Australia (1995) Aust Torts Reports ¶81-338 and accepted as correct in Arvind & Anor v Greco (1995) Aust Torts Reports ¶81-357. Hence reference to this latter case is of little assistance.
In these circumstances it is appropriate for this Court, sitting as the Court of Appeal for the Supreme Court of the Australian Capital Territory to consider the question afresh as a question of principle, particularly where in the Territory there is no statutory context which affects the decision of the High Court in Gogic.
The starting point must be Gogic. The principle guiding the award of interest in a non-statutory jurisdiction is as stated by the High Court in that case. In principle there can be no difference between awarding interest for non-economic loss calculated in dollars at the time of trial, than would be the case of calculating damages by reference to care not charged to the plaintiff but awarded by reference to a commercial rate, and at the value of money as at the time of trial. In neither case has the plaintiff been out of pocket for money actually expended. The award of interest is not concerned with awarding a plaintiff in effect damages for the erosion of money. The award of interest proceeds on the assumption that it should compensate the plaintiff for having been kept out of the damages to which the plaintiff has been found to have been entitled, from the time the cause of action accrued to the date of judgment.
It has never been thought to follow that interest is not payable with respect to non-economic loss. Gogic makes this clear. The plaintiff has still been kept out of the damages to which he or she was entitled. However, of course, since the present day value of the non-economic loss can be said to differ from medical accounts calculated in non-inflated dollars and because the award of interest is a discretionary matter, the rate of interest should take into account the fact that the damages awarded will ordinarily have already been calculated in the money value at the time of trial. That is just to say, as the High Court said in Gogic, that the interest should not be calculated at a commercial rate, as would be applied to a medical account expended, for to do so would compensate the plaintiff for damages not suffered. Rather, the calculation of interest with respect to past care should reflect the difference between the prevailing rate for secure investments and the rate of inflation, just as the interest awarded with respect to general damages does.
A difficulty presented in this case is that the sum for past services (or at least some component of it) was not calculated and expressed, as was suggested from the bar table, in the money value at date of trial but was the result of adding together a series of calculations at different periods up to the date of trial. The base figure for the calculation of interest ought to be presented in evidence at trial in values then current, and if not, evidence of the variations in that value, over the relevant period, given so that that figure might be ascertained. The evidence here does not however permit a reassessment of that figure. In particular there is no evidence at all of changes in money value which could be adopted. We do not think it likely to be either accurate, or proper on the state of the evidence, to redress the evidentiary deficiency by increasing the rate of interest to apply to past services.
The parties were also unable to agree to a rate of interest which ought to apply to an amount for past care even assuming values at the date of trial had been adopted, yet both parties argued that this Full Court should do the best it could to make any necessary calculation to avoid yet further litigation between the parties. We thus do not consider that in either case these matters should be the subject of further determinations. This litigation ought to be concluded. In these circumstances we have sought guidance from other cases as to what rate might best reflect the approach which we consider Gogic requires.
It is known that at the time Gogic was decided (30 March 1990) the relevant rate was four per cent. In cases allowing interest around the same time as the present case such as Odgaard v Stone (11 November 1993) and Patorniti v Carter (15 July 1997) the rate applied was two per cent. In Brown v Hale (1996) 1 Qd R 234, again in Queensland, a rate of two per cent was adopted because the loss, having been progressively sustained, meant half the rate of four per cent was appropriate. Here also, the notional loss has been sustained on a progressive basis from the time when the need arose to the date of judgment. In the light of these cases, it seems to us appropriate to adopt a rate of two per cent per annum rather than the rate which Higgins J below regarded as applicable (following the plaintiff’s calculation of twelve per cent but which rate was then halved), and to apply it from the time the need for care was said to arise to date of trial, some 5.8 years. We do not suggest that in this case the result achieved is necessarily accurate nor as it may have been, had there been other evidence.
CONCLUSIONS AND ORDERS
In our view the order of the Full Court should be set aside, and an award of $4,524,910 be substituted in lieu of it. This reflects the following increases: general damages $60,000; loss of earnings $100,000; past care $420,088 and interest on past care $77,725. The respondent should pay the costs of the appeal and cross-appeal in both this Court and the Full Court of the Supreme Court.
I certify that this and the preceding seventeen (17) pages are a true copy of the Reasons for Judgment herein of the Honourable Justices Hill and Kiefel
Associate:
Dated: 1 July 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
AG 59 of 1997
ON APPEAL FROM THE FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
APPLICANTAND:
STEPHEN HOUSE
RESPONDENT
JUDGES:
FOSTER, HILL, MATHEWS, KIEFEL & MADGWICK JJ
DATE:
1 JULY 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
MATHEWS J: I have had the advantage of reading in draft the judgments of Foster J, Hill and Kiefel JJ and Madgwick J. Except as to the matter of interest on past care, I agree with the orders proposed by Hill and Kiefel JJ and with their Honours’ reasons for judgment. Indeed, even on the issue of interest, I agree with the principles expressed in Hill and Kieffel JJ’s joint judgment. However I share Madgwick J’s view that those principles, when applied to the circumstances of the present case, should lead to an award of interest greater than the four per cent (or progressive two per cent) proposed by their Honours.
It will, in my view, be appropriate to apply Gogic principles to the rate of interest to be awarded on damages for past care in circumstances where those damages have been assessed according to values at the date of trial. However it may well operate unfairly to a plaintiff to apply them in relation to damages which are assessed according to the rates applicable at the time the expenses were notionally incurred. The appellant here is in that situation. Accordingly, the real question is whether there is adequate evidence to enable us to determine a rate of interest which would fairly compensate the appellant both for being kept out of his money to the date of trial (which the Gogic principles are designed to achieve) and also to take account of inflationary factors. In my view, the approach proposed by Madgwick J would fairly achieve that end. Accordingly I agree with the orders relating to interest as proposed by Madgwick J.
I certify that this and the preceding one (1) page are a true copy of the Reasons for Judgment herein of the Honourable Justice Mathews.
Associate:
Dated: 1 July 1998
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
AG 59 of 1997
ON APPEAL FROM A FULL COURT OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:
ANDREW GRINCELIS by his next friend TADAS GRINCELIS
APPELLANTAND:
STEPHEN HOUSE
RESPONDENT
JUDGES:
FOSTER, HILL, MATHEWS, KIEFEL & MADGWICK JJ
DATE:
1 JULY 1998
PLACE:
SYDNEY
REASONS FOR JUDGMENT
MADGWICK J: Except as to the rate of interest which the plaintiff should have had, I agree with the orders proposed by Hill and Kiefel JJ and generally with the reasons they give. I wish to explain my own approach to the rate of interest and to add something on two other matters.
The rate of interest
I agree that the plaintiff should have had interest on his Griffith v Kerkemeyer damages, generally for the reasons given by Hill and Kiefel JJ and those given by Foster J in his more detailed treatment of the matter. As to the rate of interest to be awarded in this case, however, I regret that I cannot agree.
The first thing to understand is that, in this case, the relevant damages were not assessed in the value of money as at the date of trial. They were assessed as the sum of the actual, past amounts which would have needed to be paid, progressively in the period between the injuries and trial, to satisfy the plaintiff’s need of care.
MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657, the landmark decision in the general area, was not however such a case. It concerned the ordinary case of “general” non-economic damages which were, in that case (and as they always are), awarded in the value of money as at the date of trial. In such a case, the High Court held that 4 per cent was an appropriate rate of interest. It held that that was so for two essential reasons:
(a)“. . . although it is a fallacy to refuse to award any interest [on an award of general non-economic damages] on the ground that the verdict contains a built-in inflationary factor, it is equally fallacious to hold that a plaintiff will be properly compensated for the delay in obtaining damages for pre-trial pain and suffering only if the award of damages contains an amount for interest calculated at the commercial rate or rates” (at 663)
(b)“. . . the use of the 4 per cent figure seems to us to be more likely to achieve fair and reasonable compensation for plaintiffs than the use of the real interest figure - which may result at times in a plaintiff obtaining no or little interest and at other times an amount of interest greater than the return which could be achieved by real-life investors on a comparable sum after the incidence of income tax” (at 665).
To my mind, it is clearly implicit in the High Court’s approach that, in respect of an item of damages, as to which the actual award of the damages is not made in current-day money values, some award of interest should be made, and the plaintiff should also have some compensation for the loss suffered because of inflationary factors, as well as for being kept out of his or her money.
I do not understand Hill and Kiefel JJ to have any contrary view as a matter of principle. Their approach is that the evidence in this case does not permit a re-assessment of the interest rate, there being “no evidence at all of changes in money value which could be adopted”. They sought guidance from certain Queensland cases. Those cases however, insofar as they have applied 4% (or, its derivative, 2%, for progressive loss), seem necessarily to have had the result that the plaintiffs did not get compensation, as in principle they should have, by way of interest for the two factors - inflation and being kept out of one’s money - to which I have referred. Such an approach is, in my respectful view, mistaken. It was not exhibited by the NSW Court of Appeal in Marsland v Andjelic (No2) (1993) 32 NSWLR 649 and Arvind & Kundo v Greco (1995) AustTortsR 81-357. That Court simply applied a commercial rate. But that approach too, in my respectful view, is not entirely free from error: it overlooks the High Court’s point in Gogic that such an approach may either overcompensate a plaintiff because a plaintiff “arguably” may get the interest to be awarded tax-free (and, it would now seem, does so get it: Whitaker v Commissioner of Taxation (1998) 153 ALR 334) or may, in certain conditions undercompensate a plaintiff:
“most investors in fixed securities in Australia since 1982 would be well satisfied to have maintained the real value of their capital and to have received an arguably tax-free return of 4 per cent per annum on the current value [we are, in this case, concerned with the past] of that capital” (Gogic at 665)
But, in any case, there are other sources of guidance than actual evidence of changes in money value. As Higgins J noted, if interest “at commercial rates” was appropriate, the plaintiff’s calculation, undertaken using 12 per centum, “was not challenged as being [in]appropriate”. In an area where overmuch insistence on exactitude in giving effect to broad principle is a mistake, the rate thus conceded could be used as the starting point, its possible inadequacy as a measure of the sum of a “real” interest rate and the rate of the decline of the value of money being overlooked. Such rate should however be discounted to some extent, say by 25 to 35%, to allow for its non-taxable quality in the hands of the plaintiff. Further, the rates prescribed under the Rules of the ACT Supreme Court and of this Court for interest on judgment debts are not irrelevant. Those rates, from injury to trial, have been:
Dates ACT Supreme Court
(O 42A rl SCR)Federal Court
(O 35 r8 FCR)15/2/89 - 11/3/90
12/3/90 - 30/6/90
1/7/90 - 11/8/91
12/8/91 - 31/12/91
1/1/92 - 31/12/92
1/1/93 - 30/6/93
1/7/93 - 16/11/93
17/11/93 - 31/12/9515
15
20
20
15
15
12
1215
17
17
15
15
12
12
10
The weighted average of these rates over the period is 15% to the nearest whole percentage point. As indicated above, something like 30% thereof ought to be deducted because the plaintiff will not pay tax on the interest.
In the result, in my view, 10% would not be inappropriate, having regard to these indicators, and it would therefore be reasonable to allow 5% for the progressive nature of the loss. The rest is arithmetic. Mine produces a result of $194,326.
There are, it is to be recognised, imprecisions in this approach, as there are in any other. It is an approach, however which, with respect, is preferable to depriving the plaintiff, in effect, of most of the fruits of his success in principle with his appeal, merely because it evidently did not occur to his legal advisors, in the then state of the law, to do other than try to put before the Court accurate evidence of what the plaintiff’s past needed services would actually then have cost. As indicated, my approach is also indistinguishable in principle from the notions underlying the advice for future cases that Hill and Kiefel JJ have offered, except perhaps as to the impact of taxation. If that advice is not followed (and it may not immediately come to universal attention), the approach I favour can fill the gap.
I would therefore propose that the amount of the judgment for the plaintiff should be increased accordingly and that liberty to apply within 7 days as to any perceived arithmetical error in the interest calculations be reserved.
As a minor addendum on the question of the allowability of interest, in the recent decision of a Full Court of this Court in Black v Lipovac (Federal Court of Australia, Miles, Heerey & Madgwick JJ, 4 June 1998, unreported), it was implied that Hodges v Frost (1984) 53 ALR 373 was binding authority on a single judge of the ACT Supreme Court. For the reasons explained in the other judgments in the present case, the relevant passage in Hodges v Frost was obiter dicta. Such implication was therefore erroneous and, as a member of the court in Black, I ought to say that it was made per incuriam.
Quantum of general damages
It was an implicit premise of the approach of Gallop and Ryan JJ that a figure of the order of $240,000 would have been appropriate only in “the most serious category of case”. I would
not wish to be thought necessarily to agree with that premise. The matter was not fully argued before us and did not, therefore, fall for determination here.
An “intuitive” approach to the question of the assessment of damages for future care?
The respondent invited the Court to reduce this assessment upon the basis that ex facie it appears “unreasonably disproportionate to the circumstances of the injury in question” (per Barwick CJ Arthur Robinson (Grafton) Pty Ltd v Carter (1968) 122 CLR 649 at 655). However, I regard such an approach as inappropriate and insupportable since Sharman v Evans (1977) 138 CLR 563, esp. per Gibbs and Stephen JJ at 572. See also the discussion in Luntz, “Assessment of Damages” (1990) at pp 41-2 and the cases there cited.
I certify that this and the preceding four (4) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick
Associate:
Dated: 1 July 1998
Counsel for the Applicant: L Morris QC and C Adamson Solicitor for the Applicant: Abbout Tout Solicitors Counsel for the Respondent: M Neil QC and H Marshall Solicitor for the Respondent: J Crestani and Associates Date of Hearing: 9 March 1998 Date of Judgment: 1 July 1998
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