| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : HEWITT -v- TONKIN [2003] WADC 203 CORAM : FENBURY DCJ HEARD : 14-15 JULY 2003 DELIVERED : 29 SEPTEMBER 2003 FILE NO/S : CIV 1204 of 2002 BETWEEN : REBECCA J HEWITT Plaintiff
AND
LESLIE G TONKIN
Defendant
Catchwords: Damages - Fatal Accidents Act 1959 - Discount for contingencies - "Vicissitudes of life" - "discount for remarriage" - Lack of actuarial evidence
Legislation: Fatal Accidents Act 1959
Result: Judgment for plaintiff
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Representation:
Counsel:
Plaintiff : Mr D R Clyne
Defendant : Mr M McAuliffe
Solicitors:
Plaintiff : Friedman Lurie Singh
Defendant : McAuliffe Williams & Partners
Case(s) referred to in judgment(s):
De Sales v Ingrilli [2002] HCA 52
Gardner Bros & Perrott (WA) v Seat, FCt SCt of WA; Library No 7318; 13 October 1988
Kember v Thackrah, unreported; SCt of WA; BC200004489; 7 August 2000 - [2000] WASCA 198
Rosniak v Government Insurance Office of New South Wales (1997) 41 NSWLR 608
Case(s) also cited:
Nil
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1 FENBURY DCJ: This is a claim for damages made pursuant to the provisions of the Fatal Accidents Act. The deceased, one Jason Shaun Ripepi was killed in a motor vehicle accident on 14 July 2001. The vehicle in which he was a passenger was struck by a truck driven by the defendant. The defendant has admitted negligence.
2 The plaintiff was born on 11 October 1981. She has two children. She was living in a de facto relationship with the deceased at the time of the accident. Her eldest child, Louchlan, was not the son of the deceased. However the deceased is the father of her other child, Antonio, who was born after his father died. 3 There is no dispute in this case that the plaintiff is entitled to damages arising from the death of the deceased. Indeed, to the credit of the respective counsel, many of the issues in the case have been resolved and are formalised in a minute of agreed facts set out below. 4 The case has not been capable of "complete resolution" because of disagreement about the appropriate discount for contingencies in the light of the recent decision of the High Court of Australia in De Sales v Ingrilli [2002] HCA 52. 5 It is convenient to set out the terms of the minute of agreed facts in full. They are: "1. The plaintiff Rebecca Jane Hewitt (the plaintiff) was born on 11 October 1981. 2. The deceased Jason Shaun Ripepi (the deceased) was born on 25 May 1980. 3. Louchlan Hewitt, a child of the plaintiff, was born on 29 August 1999. 4. Antonio Jason Dominic Jonathon Shaun Ripepi, a natural child of the plaintiff and the deceased, was born on 4 March 2002. 5. The deceased died on 14 July 2001 as a consequence of the negligence of the defendant. 6. The deceased and the plaintiff lived in a permanent and bona fidede facto relationship from approximately March 1999 and from that date the plaintiff was financially dependent on and supported by the deceased
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such as to deem the plaintiff a "relative" of the deceased pursuant to Sch 2, cl (h)(i) Fatal Accidents Act 1959 as amended. 7. The child Louchlan Hewitt lived with the plaintiff and the deceased from the date of his birth until the death of the deceased and during that time was a person in respect of whom the deceased stood in "loco parentis" such as to deem him a "relative" of the deceased pursuant to Sch 2 cl (d) Fatal Accidents Act 1959 as amended. 8. The child Antonio is the natural child of the plaintiff and the deceased, born after the death of the deceased, who pursuant to s 3(4) of the Fatal Accidents Act 1959, as amended is to be treated as having been born before the death of the deceased. 9. The dependency of the plaintiff and the children is to be calculated on the basis of a net income of $600 per week inclusive of superannuation and all other gratuitous entitlements such that the maximum dependency of the plaintiff and the children is agreed at $338,498. The maximum dependency assumes a retirement age for the deceased of 65 years and the plaintiff remaining solely dependent on the deceased until then (those assumptions are in issue). The following matters are agreed between the parties subject to the approval of the trial judge: 10. Both children would have been dependent on the deceased until 18 years of age. 11. The appropriate method for calculating the dependency of the plaintiff and the children of the marriage for the purposes of this trial is that set out in Luntz: Assessment of Damages for Personal Injury and Death (4th ed) at Table 9.1, p 501." 6 During the course of the trial an error in the calculation of the figure representing the maximum dependency of the plaintiff and children referred to in par 9 was discovered. Instead of the sum of $338,498 being the relevant figure, it was agreed that the figure should be the sum of the total past loss being $49,327 and the total future loss being $354,186
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which amounts to a figure of $403,513. These figures were calculated as at 14 July 2003. 7 As counsel put it in submissions: "The issue then is what discount for contingencies should be applied to the calculations for future loss." 8 The issue of discount for contingencies is raised by the defendant in par 5 of the amended defence in the following terms: "If, which is not admitted, the defendant is entitled to bring a claim for damages as alleged in the statement of claim or at all, the defendant says that the plaintiff's award for damages should be discounted on the basis that she had derived and/or is deriving material benefits from a de facto relationship she entered into shortly after the deceased's death." 9 This assertion was further particularised in "further and better particulars" as follows: "The defendant provides the following further and better particulars in relation to par 5 of his amended defence filed herein; 1. The plaintiff commenced a de facto relationship with Casey Eddy (Eddy) six weeks or so after the death of Jason Ripepi. 2. The plaintiff and Eddy lived together at 35 Kitchener Road, Merredin, prior to Eddy's relocation to Perth to take up employment with Coventry's in Midland. 3. Following Eddy's relocation to Perth, he stayed with the plaintiff at her home on weekends and assisted her with the care of her children. 4. It is a reasonable expectation that the plaintiff;
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given her demonstrated ability to form close relationships with men, including Jason Ripepi despite her social circumstances." 10 Virtually the entirety of the evidence taken at trial related to the issue raised above. The plaintiff gave evidence denying that she was in a de facto relationship with Mr Casey Eddy. Mr Eddy gave corroborating evidence. On behalf of the defendant four witnesses gave evidence concerning matters they observed from which it was submitted an inference could be drawn that the assertions contained in par 5 of the amended defence were made out. 11 Before turning to a brief consideration of the evidence adduced at trial, I shall briefly review the decision in De Sales v Ingrilli (supra) because each party relies upon selected remarks made by the various judges that comprised the court in that case. 12 De Sales v Ingrilli was a case that required the assessment of damages under the Fatal Accidents Act (WA) 1959. In the assessment of damages the trial judge made no deduction for the general "vicissitudes of life" but applied a discount of five per cent to the damages assessed, "to reflect the chance of the [appellant] obtaining financial benefit from remarriage". In other words a "remarriage discount". 13 On cross-appeal to the Full Court the defendant (respondent) argued that the trial judge erred in not applying a significantly higher discount, put at 25 per cent and the appellant argued that no remarriage discount should have been applied at all. 14 In the Full Court the "remarriage" discount was increased to 20 per cent, account being taken of the plaintiff's "age and credentials". The overall deduction made in relation to the assessment of damages was 20 per cent for the possibility of remarriage and five per cent for general contingencies. The plaintiff appealed to the High Court. 15 The Chief Justice, in allowing the appeal, observed at par 29 that: "In most cases, courts cannot safely predict, either from statistics or a subjective assessment of the claimant in court, whether the claimant is more or less likely than any other person to remarry." 16 And at par 32:
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"…the possibility of a plaintiff remarrying to pecuniary advantage should ordinarily be treated as one of the 'vicissitudes of life'. Allowance is to be made for the contingency of a financially beneficial remarriage, in the same way as allowance is made for the contingency of premature death, injury, unemployment or financial ruin. It is a chance which usually cannot be predicted with any degree of certainty in a particular case, but which, in the population as a whole, is not a chance that can be disregarded as insignificant." 17 His Honour went on to observe however that there can be some cases where, by reason of special or unusual circumstances, it is possible to predict with some degree of certainty the likelihood of a financially beneficial remarriage. Such circumstances would include where a person has actually remarried to his or her pecuniary advantage before trial. His Honour then said at par 33: "Similarly, there may be special circumstances where a person is engaged to be married, or living in a de facto relationship, and that relationship is or will be financially beneficial. In such circumstances, the evidence may be less strong than in the case of actual remarriage, but may still be sufficiently concrete to allow a special discount to be made." 18 Their Honours Gaudron, Gummow and Hayne JJ in separate reasons were of similar views to the Chief Justice. 19 At par 72 their Honours stated: "The range of possibilities that lie before those for whose benefit a claim is made under legislation modelled on Lord Campbell's Act is very wide. The financial consequences of some may be to the advantage of the surviving relatives, others may be to their disadvantage. Why should one of those possibilities (remarriage, or the formation of some other continuing relationship) be considered separately from all others? To consider it separately assumes that it is a contingency whose likelihood of occurrence can be separately assessed with reasonable accuracy, and that the financial consequences of its occurrence will, more probably than not, tend in one direction (financial advantage) rather than the other. 20 Their Honours continued at par 74:
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"74. Even if these difficulties of predicting that a surviving spouse will form some new continuing relationship were to be surmounted, the financial consequences of its occurrence are even less predictable. Who is to say that the new relationship will endure, and that, if it endures, it will provide financial advantage to the person who is now the surviving spouse? And if it is a financially beneficial relationship at its outset, who is to say that events will intervene thereafter? Will the new spouse or partner suffer some catastrophe and the person who is now the surviving spouse then have to care and provide for the new partner, the children of the first union, any children brought by the new partner to the new union, and any children born of a new union? Who can say? 75. It is these last points about the financial consequences of a new relationship which are of critical importance. They deny the validity of looking separately at some 'discount for remarriage' over and above whatever discount is made for the 'vicissitudes of life'. Among those vicissitudes are all the hazards and benefits that may befall a person or, where the claim is made by a surviving spouse, may befall a couple during life. Any new union, which is formed after the termination of the union which underlies a claim made pursuant to a wrongful death statute modelled on Lord Campbell's Act, is as exposed to precisely the same kinds of hazard and danger as was the earlier union. It, too, may end in death, separation or divorce. The financial advantages and disadvantages to one partner will change throughout the continuance of the union as the careers and ambitions of the partners change both with and against their will. Those, who today are receiving income from personal exertion, may, tomorrow, cease doing so for any number of reasons. Those who are employed may have the employment terminated. Those who are self-employed may fall ill, or the venture in which they are engaged may fail. Those who receive income from investments may invest unwisely or unprofitably. Those who are now not employed outside the house may later forge a new career either because they want to or because they feel they should or must do so. And so the examples can be multiplied. Yet if these
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possibilities are taken into account in assessing the vicissitudes in which the former union was subject (and they must) to ignore them when considering a new union, by assuming that the new union would be destined to survive and prosper, would be to shut one's eyes to reality. 76. It is, therefore, wrong to treat the prospect of remarriage or the prospect of forming some new continuing relationship as a separate item for which some identified discount must be made from whatever calculation is made of the present value of future benefits that would have flowed from the deceased to the relatives. Even if the prospects that a surviving spouse would remarry or enter a new continuing relationship could be assessed (and there will be few cases where that would be possible), predicting when that would occur is impossible, and predicting some likely outer limit of time by which it would probably have occurred is only slightly less difficult. But most importantly, it cannot be assumed that any new union will be, or will remain, of financial advantage to any of those for whose benefit the action is brought. That being so, some financially advantageous marriage or relationship must be treated as only one of many possible paths that the future may hold. It is wrong to single it out for special and separate allowance. That others in the past have had damages reduced on this account is not reason enough to continue the error." And then finally at par 78: "That is not to say that, if there is evidence at trial that a new relationship has been formed, account may not be taken of evidence revealing whether that brings with it financial advantage or disadvantage. It would be wrong to adopt the rule followed in some American jurisdictions and require the tribunal of fact to assess the damages without that evidence. If the relationship is reflected in marriage, or if there is relevant legislation creating rights between de facto partners, the property rights of the partners will no doubt loom large in that assessment. Likewise if there is evidence that a surviving spouse (or de facto spouse) intends, at the time of trial, to establish such a relationship with an identified person, account
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may be taken of evidence of the probable financial consequences of that relationship. In each case, however, it would be wrong to assume that the financial consequences revealed in evidence will inevitably continue." 21 Counsel for the plaintiff submitted that it was now clear from De Sales v Ingrilli (supra), and especially the judgment of Gaudron, Gummow and Hayne JJ that no special discount should be made for the contingency of remarriage. However the High Court does concede the possibility of cases where, if the evidence is there to support the argument, some special discount can be made. The onus of proof, that is of proving that a relationship has been formed and that benefit is or will flow therefrom, is upon the defendant. 22 Counsel for the defendant conceded the effect of the decision in De Sales v Ingrilli but submitted that the evidence established there was a current and likely future relationship and that as a consequence there should be a special discount for the probable financial consequences of remarriage. However the main thrust of defence counsel's submissions was as to the quantum of the discount for "vicissitudes of life". In Western Australia the range has been held to be between two per cent and six per cent (Kember v Thackrah, unreported; SCt of WA; BC200004489; 7 August 2000 - [2000] WASCA 198 – referred to in De Sales v Ingrilli). 23 Counsel submitted that in New South Wales and the ACT the generally accepted standard discount for general contingencies is 15 per cent. (Rosniak v Government Insurance Office of New South Wales (1997) 41 NSWLR 608). 24 I shall firstly deal with the issue of whether the plaintiff is already enjoying or likely in the future to enjoy a relationship such as may require a "special discount for the probable financial consequences of remarriage". In my view the evidence adduced on this issue can be fairly shortly dealt with as follows. 25 The witnesses called on behalf of the defendant gave evidence which fell short of persuading me that there was indeed a de facto relationship between the plaintiff and Mr Eddy. The evidence goes no further than raising a suspicion. Both the plaintiff and Mr Eddy gave evidence on oath denying that they were in any de facto relationship nor that the same was contemplated. The witnesses called on behalf of the defendant spoke about observations they made of various kinds, and of various
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conversations upon the basis of which the Court was invited to draw an inference that the plaintiff had already commenced another relationship. The evidence fell short of being sufficient and in any event many of the assertions were disputed and not really capable of resolution. 26 In any event I observe that Mr Eddy is only 19 years of age. He has ambitions in his employment which he hopes will soon be furthered by his transfer to Port Hedland. It seems to me that even if the plaintiff and Mr Eddy were having some sort of relationship during the relevant period, which might account for some of the matters that witnesses claimed to have observed, the relationship fell short of being a de facto relationship. It has not been shown that it was a relationship in which the plaintiff and Mr Eddy were committed to each other as husband and wife with all that that entails. 27 The plaintiff is a young woman with two children by different fathers. She may or may not form a relationship in the future. Quite frankly I think it is likely that she will form a relationship at some time. However nobody knows whether it will be beneficial or not and how long it will last. 28 In my view there is no sufficient evidence for the Court to accept the invitation to make any special discount for remarriage in the assessment of damages in this case, beyond the general discount for the vicissitudes of life. 29 As I have indicated earlier, counsel was more concerned to press the argument that the quantum of the discount for vicissitudes of life should be increased. 30 Counsel submitted that in De Sales v Ingrilli (supra) three of the justices namely McHugh, Kirby and Callanhan JJ had expressed some disquiet at a discount rate of two to six per cent in Western Australia. In his submissions counsel put it like this: "A discount figure of 5% means that the judge is 95% confident of the estimate being correct. Given all of the assumptions and uncertainties involved in making an assessment of the plaintiff's loss of dependency over the next 44 years, this percentage can be seen as unreasonably low particularly when compared with the allowances made in other States." – And he referred there to the comments by McHugh J at par 115, Kirby J at par 165 and Callanhan J at par 197 in De Sales v Ingrilli.
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31 In his submission that the discount for general contingencies should be increased counsel also relied upon observations made by Kirby J at par 164 of De Sales v Ingrilli (supra) where his Honour said:
"This disparity between the approaches taken to "general contingencies" in different States may one day need to be considered by this Court. On the face of things, there would appear to be no justification of legal principle for such a wide divergence in the rule applied by courts in different parts of Australia." 32 His Honour then went on at par 165, when commenting upon the range of discounts followed in Western Australia to say: "It seems rather low, compared with the standard discount in other States, such as New South Wales." His Honour intimated that he felt the question was due for comprehensive review but left that for another day. 33 Counsel then urged the Court to recognise that there was no reason in legal principle for there to be different discount rates applicable in Western Australia by comparison with the Eastern States and that therefore the discount for contingencies, in spite of the Full Court's views expressed in Kember v Thackrah (supra) should be increased substantially "to at least 15 per cent". There was then a submission that additional factors would make a discount of "25-50 per cent as not unreasonable". 34 It is against those circumstances that counsel for the defendant invites the Court to increase the discount for general contingencies to a figure well above the range in this State. 35 I have some sympathy with the defendant's case but I do not feel that I am able to depart from the range that has been identified in this State. Before discounting an award by an amount greater than six per cent for the vicissitudes of life including the consequences of remarriage amongst the myriad other considerations, there would need to be an evidential basis for doing so. In the absence of any evidence, actuarial evidence for example, the range in Western Australia falls between two and six per cent. 36 In my view the appropriate discount for contingencies for the vicissitudes of life in this case would be six per cent.
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37 Counsel for the plaintiff prepared a schedule of damages which sets out the calculations for past and future loss of dependency. For the purposes of those calculations the first day of trial, being 14 July 2003, was chosen as the relevant date. The date for delivery of this decision is 29 September 2003. That date is 11 weeks, exactly, from the first date of the trial.
38 I have carefully perused the calculations made by counsel and I am able to make the appropriate adjustments with respect to past loss, however the method of calculation for future loss of dependency as set out in the table is difficult to follow and I am not confident that accurate figures will result. Accordingly I invite counsel to prepare calculations as at 29 September 2003 which, if agreed, should be capable of expression in a minute of agreed orders. 39 The calculation should assume the following: (a) Both children would have been dependent on the deceased until 18 years of age. (b) The appropriate method for calculating the dependency of the plaintiff and the children of the marriage for the purposes of this trial is that set out in Luntz: Assessment of Damages for Personal Injury and Death (4th ed) at Table 9.1, p 501. (c) Retirement age at 65 (Gardner Bros & Perrott (WA) v Seat, FCt SCt of WA; Library No 7318; 13 October 1988).
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