Hills v State of Queensland
[2006] QSC 244
•4 September 2006
SUPREME COURT OF QUEENSLAND
CITATION:
Hills v State of Queensland [2006] QSC 244
PARTIES:
CHRISTOPHER HILLS
(plaintiff)
v
STATE OF QUEENSLAND
(defendant)FILE NO/S:
BS 5440 of 2002
DIVISION:
Trial Division
PROCEEDING:
Trial
ORIGINATING COURT: Supreme Court of Queensland DELIVERED ON:
4 September 2006
DELIVERED AT:
Brisbane
HEARING DATE:
18-21, 24, 26-28 April and 2-5, 8, 11-12 May 2006
JUDGE:
McMurdo J
ORDER:
Judgment for the plaintiff in the sum of $5,502,793.
CATCHWORDS:
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – where the plaintiff’s birth involved an emergency caesarean in the circumstance of a foetal cardiac arrest – where the plaintiff suffered brain damage resulting in a type of cerebral palsy known as choreo-athetoid – where the plaintiff claims damages for negligence against the State of Queensland – where the State of Queensland has admitted negligence – where the plaintiff was later diagnosed with Type 1 diabetes mellitus – where differing expert evidence on probable lifespan of plaintiff – where assessment of probable lifespan of plaintiff relevant to measure of damages
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – MEDICAL AND HOSPITAL EXPENSES – where the plaintiff is entirely dependent upon the assistance of others for every day activities – where the plaintiff requires the attendance of carers on a twenty-four hour basis – where the cost of care varies according to the length of the carer’s shift – whether appropriate for carers to work 8, 12 or 24 hour shift arrangements – whether market cost of care appropriate for past and future gratuitous care and past and future paid care – whether the cost of future care should be discounted for contingencies – whether the plaintiff’s claim for expenses and maintenance of future therapeutic aids, appliances and equipment appropriate and reasonable – whether plaintiff entitled to costs arising from future medical treatment, paramedical treatment and pharmaceutical costs
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – LOSS OF EARNINGS AND EARNING CAPACITY – PROSPECTIVE EARNING CAPACITY OF YOUNG CHILD – where the plaintiff has no earning capacity as a result of cerebral palsy – where calculations were performed on three alternative levels of income including solicitors, human resources managers and average weekly earnings – whether assessment of earnings should be based on the weekly earnings of solicitors, human resources managers or average weekly earnings – whether the plaintiff is entitled to an allowance for long service leave – whether the plaintiff is entitled to an allowance for superannuation
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – OTHER PECUNIARY DAMAGE – whether plaintiff entitled to costs of house modifications for the parental home and the additional capital cost of modifying a house when the plaintiff lives independently from his parents – whether plaintiff entitled to costs of building and maintaining a hydrotherapy pool or the costs of using a public hydrotherapy pool facility – whether plaintiff entitled to maintenance costs of his parents house and maintenance costs in his own house – whether plaintiff entitled to costs of house cleaning and housekeeping – whether plaintiff entitled to costs of technological aids and training in the use of technological aids – whether plaintiff entitled to additional educational costs– whether plaintiff entitled to additional motor vehicle capital costs and standard running costs – whether plaintiff entitled to additional holiday costs – whether plaintiff entitled to a case manager – whether plaintiff entitled to out-of-pocket expenses and interest on out-of-pocket expenses – whether the public trustee or a funds manager should be appointed
DAMAGES – MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR TORT – MEASURE OF DAMAGES – PERSONAL INJURIES – GENERAL DAMAGES– NON-PECUINARY DAMAGE – PAIN AND SUFFERING – LOSS OF AMENITIES OR CAPACITY FOR ENJOYMENT – LOSS OF EXPECTATION OF LIFE – whether the plaintiff’s claim for general damages and interest on general damages is appropriate and reasonable
Income Tax Assessment Act 1936 (Cth), s 159P
Public Trustee Act 1978 (Qld), s 59, s 59(1), s 59(4)
Supreme Court Act 1995 (Qld), s 16(1)
Trustee Companies Act 1968 (Qld).Castro v Hillery & Ors [2001] QSC 510, discussed
Goode v Thompson [2001] QSC 287, discussed
McChesney v Singh & Ors [2003] QCA 498, distinguished
Mott v Fire and All Risks Insurance Co Ltd [2000] 2 Qd R 34, discussed
Simpson v Diamond [2001] NSWSC 925, cited
Theden v Nominal Defendant [2004] QSC 310, discussedVan Gervan v Fenton (1992) 175 CLR 327, applied
Winterton v Mercantile Mutual Insurance [2000] QCA 249, discussed
Willett v Futcher [2005] HCA 47, appliedCOUNSEL:
L A Levy SC, with M E Eliadis, for the plaintiff
S C Williams QC, with J P Kimmins, for the defendantSOLICITORS:
Shine Lawyers for the plaintiff
Cooper Grace Ward for the defendant
McMURDO J:
Contents
Introduction [1] Probable lifespan [8] Evidence as to lifespan [9] General damages [41] Interest on general damages [44] Future care [45] Tax rebate on future care [92] Future care assessment [100] Past care [101] Loss of earning capacity [102] House modifications [116] Hydrotherapy [133] House maintenance [139] House cleaning and housekeeping [142] Future need for therapeutic aids, appliances and equipment [151] Maintenance on therapeutic aids, appliances and equipment [166] Technology issues [167] Future medical treatment [191] Future paramedical treatment [198] Speech pathology [198] Occupational therapy [205] Nutritional therapy [206] Podiatrist [207] Psychologist [208] Physiotherapy [209] Home nursing [210] Diversional therapy [213] Pharmaceuticals [218] Additional education costs [221] Additional motor vehicle costs [229] Additional holiday costs [237] Case management [252] Out-of-pocket expenses [262] Funds management [263] Conclusion [277]
The plaintiff, Christopher Hills, is a boy born at the Toowoomba Base Hospital on 6 June 1996. His birth involved an emergency caesarean section in the circumstance of a foetal cardiac arrest. He suffered brain damage and in consequence he has and will always have a type of cerebral palsy, described as choreo-athetoid.
He claims damages for negligence against the State of Queensland, which operated the hospital and employed the relevant staff. The State admits negligence in relation to Christopher’s birth, for which it is legally responsible and which is the cause of Christopher’s cerebral palsy. The issues for determination concern the assessment of damages.
There is no substantial dispute as to Christopher’s medical condition and the nature and extent of his disabilities. Cerebral palsy is a chronic disability of the central nervous system characterised by aberrant control of movement or posture. In Christopher’s case, this results from damage to an area of the brain, the basal ganglia, which is responsible for co-ordination of muscle movements. His disabilities result from impaired motor functions. Christopher has no intellectual disability. His IQ has been measured in the average to above-average range.
He is unable to stand or sit unsupported. At present, he is able to walk a short distance with the use of a device called a Mulholland walker. He is able to crawl on his back and to roll over. He has poor fine motor hand skills and is unable to reach and grasp an object. He has no functional hand use. Consequently he cannot feed himself. He can chew and swallow food, although there is a question as to how long it takes him to finish a meal. The defendant does not accept that he takes as much time in finishing a meal as his parents estimate (an issue said to be relevant to the cost of care). He is able to use a computer by using a switch which he operates by moving his head.
He has no impairment in his vision or hearing. But he is severely impaired in his speech. His words are mostly unintelligible except for those whose ear has become accustomed to his speech. So his parents are able to understand most of what he says. Christopher gave evidence at this trial with the assistance of his father as a translator. He then impressed me, as he has many others, as a bright outgoing child. His linguistic skills are described by a speech pathologist as at least “reasonable in the context of his limited opportunities to verbally communicate”[1] and his vocabulary is described as sophisticated for his age. There is no issue that his award should include an allowance for the cost of appropriate communication aids, the detail of which I will discuss, but there is a contest as to what is reasonably required.
[1]Ms Briker-Bell report 15 March 2004, p 12
Not long before his fifth birthday, Christopher was diagnosed with Type 1 diabetes mellitus. This is a permanent condition which is not caused by the circumstances of his birth or his cerebral palsy. The condition is now managed by his use of an automated insulin delivery pump.
Christopher lives with his parents and his younger sister in the family home at Toowoomba. He is entirely dependent upon the assistance of others for everyday activities, such as eating, bathing, toileting, dressing and undressing, physical hygiene, the cleaning of his teeth and his movement around the house and elsewhere. He is incontinent for both bladder and bowel control. With some assistance, the heavy burden of his care to date has been borne by his parents. His father has given up work to do so. Christopher receives home schooling and also attends a local primary school on one day per week. For the rest of his life he will be totally dependent on the care of others and he will require the services of, or at least the presence of, carers on a 24 hour basis.
Probable lifespan
For many heads of damage here it is necessary to assess Christopher’s probable lifespan, or his probable survival as his counsel put it. Although this assessment is sometimes described as one of life expectancy, I will use that term to refer a different thing, which is the average age of survival of members of a comparable group. Although Christopher’s likely lifespan is indicated by the life expectancy of a certain group or groups, it is a different measure because it has regard to Christopher’s particular condition and any circumstances which tend to suggest that his prospects are different from that average.
Evidence as to lifespan
As the respective arguments accepted, Christopher’s likely lifespan is affected by both his cerebral palsy and his diabetes. One witness called by the plaintiff,
Dr Kennedy, said that his lifespan would not be shortened by his cerebral palsy, but another witness for the plaintiff, Dr Harbord, said otherwise. So does the extensive published research which Dr Harbord discussed. But Dr Harbord said that Christopher’s lifespan was likely to be longer than the average for children of his age who suffer cerebral palsy, because of his clinical assessment of Christopher’s particular health and circumstances. He also said that there was some cumulative effect upon lifespan from Christopher’s diabetes. Another witness for the plaintiff, Dr Jack, seemed to agree that his diabetes was likely to have that effect although it would be minimal. The defendant relies upon the evidence of its witness
Professor Strauss. He has not made a clinical assessment of Christopher: he is not qualified to do so. But he has undertaken a statistical analysis of the life expectancy of a cohort of cerebral palsy sufferers which he says is fairly representative of Christopher’s case. He also offered a view as to the extent of the cumulative impact of Christopher’s diabetes.
I go first to Dr Harbord’s evidence. He is a paediatric neurologist practising in Adelaide. He is not one of Christopher’s treating doctors; he has examined Christopher twice but only for the purposes of this case. He has been a visiting paediatric neurologist at Adelaide hospitals and in private practice in paediatric neurology since 1990 and his résumé refers to his research interests as including epilepsy, birth asphyxia and neurogenetics. In that résumé, which accompanied the first of his reports, there is no reference to any particular interest or expertise in cerebral palsy or diabetes, or the effect of either upon lifespan. However, in his oral evidence, he said he was interested in the survival prospects of children with cerebral palsy because:
“As part of my everyday clinical practice, I look after children with cerebral palsy and I’m involved in the management of their case which is predominantly children with epilepsy but other aspects of their care as well, and that’s in conjunction with paediatricians and general rehabilitation paediatricians.”
Because he is a paediatrician, his patients pass from his care to that of other specialists when they reach early adulthood. But he says that he has an interest in survival rates also from his membership of what is called the mortality review committee for intellectually disabled adults and children in South Australia, some of whom have cerebral palsy. Overall he could not be described as a researcher on the effect of cerebral palsy on life span. His opinions about Christopher’s lifespan were given on the basis of his interpretation of the published research of others as well as his clinical assessment of Christopher. His opinion upon the impact of Christopher’s diabetes has a less obvious foundation, as I will discuss.
Ultimately, Dr Harbord’s view is that Christopher has an 85 per cent chance of surviving to age 30, and if he does so, then he should live another 35 years, subject to a two year reduction for Christopher’s diabetes. He has reached that view in this way. On 22 October 2002 he examined Christopher and interviewed Christopher’s parents. He was provided with information as to the circumstances of Christopher’s birth and Christopher’s medical history to that point. His first report was then written on 25 October 2002, when Christopher was then a six year old. Much of that report was concerned with the causes of Christopher’s cerebral palsy. But he also addressed, as requested, Christopher’s likely lifespan. He referred to a study by Dr Eve Blair entitled “Life expectancy among people with cerebral palsy in Western Australia”, published in 2001, which he said “showed that the highest rate of mortality in cerebral palsy occurred in the first five years of life, following which there was a steady decline to age 15, and then the mortality rate remained steady for the next 20 years”. He observed that as Christopher had survived beyond five years of age he had “therefore passed the period in which the highest rate of mortality occurs”. He said that Dr Blair’s study had also found that “the strongest single predictor for outcome was intellectual disability” and observed that “Christopher is able to speak and is able to use a computer using his right foot, implying that he does not have a severe intellectual disability, and may in fact have an IQ in the borderline or average range”. (At that stage Christopher’s IQ had not been assessed). He next referred to a study by JU Crichton, published in 1995, which he said showed that those with the choreo-athetoid type of cerebral palsy, as Christopher has, have better survival prospects than those with what he described as the spastic quadriplegic type of cerebral palsy. He then referred to a study undertaken by Dr Jane Hutton entitled “Effect of severity of disability on survival in North East England Cerebral Palsy Cohort”, published in 2000, which he described as “the most accurate study of lifespan in children with cerebral palsy”. He noted Dr Hutton’s findings that life expectancy was affected by the child’s functional disability, i.e. manual and ambulatory disabilities, as well as by cognitive function. By reference to a certain table appearing in Dr Hutton’s paper, Dr Harbord then offered the estimate “that as Christopher has now survived to over six years of age, he has at least a 65% chance of surviving to 30 years of age”.
As to the prospects of surviving after age 30, Dr Harbord referred to calculations published by Professor Strauss (and another) with respect of life expectancy for adults with cerebral palsy, noting that they showed that the survival rate of adults was better than that of children, and was dependent on a person’s functional ability.
Dr Harbord then offered the opinion that:
“… assuming that Christopher has no change in his functional abilities at 30 years of age, that he is able to roll and is independently able to crawl around, while he is fed by others and is not able to self feed, I estimate that if he survives to 30 years of age he will have an additional life expectancy of another 36 years, given that the lifespan of Australian males is 4 years more than United States males.” (The Strauss study involved American data).
He concluded in his first report as follows:
“On the balance of probabilities therefore, Christopher is likely to survive to 30 years of age. If he survives to 30 years of age, then his additional life expectancy will be a further 36 years at least, however I think this is likely to be further improved because he has a choreo-athetoid, rather than spastic quadriplegic form of cerebral palsy, and his IQ is likely to be near the average range. He does not have a severe or profound intellectual disability.”
Dr Harbord wrote another report in June 2004, after he had been sent a psychologist’s report showing Christopher’s IQ was in the average to above average range and also the first report of Professor Strauss (dated 24 March 2004).
Dr Harbord revised his estimate of Christopher’s chance of surviving to 30 years of age, from the previous 65 per cent to 80 per cent, which he explained by the assessment of Christopher’s “normal IQ”, the good management of his diabetes, the good care he was receiving at home and the fact that Christopher had by then survived to aged 8. He said that if Christopher survived to 30 years of age, his expected lifespan would be an additional 32 years, which he said allowed for some reduction of lifespan for Christopher’s diabetes.
In February 2006, Dr Harbord saw Christopher again and wrote his third report. By then he had read reports by Dr Kennedy and Dr Jack. He again referred to the 2000 publication by Dr Hutton and the same table from that report. Noting that Christopher had now survived to almost 10 years and had an IQ in the “high-average range”, he again revised his estimate of Christopher’s lifespan by saying that he now had an 85 per cent chance of surviving to 30 years of age, and if so he was likely to live an additional 35 years, which allowed a reduction of two years for his diabetes. He was critical of Professor Strauss’ report:
“Epidemiological studies provide data about groups. To enable comparisons across groups, epidemiologists combine individuals into categories based on certain functional or clinical characteristics. However this does not necessarily provide an accurate picture about an individual with cerebral palsy. The questionnaire by Dr David Strauss and Robert Shavelle is necessarily a “pigeon-holed” overview of a patient’s clinical condition, but does not allow for individual variation. Epidemiological studies therefore can only provide an estimate of life expectancy which may not necessarily apply to an individual, especially if that individual is highly functioning compared to others in that group. For example Christopher’s mobility is much better than allowed for in the classification “rolls or sits”.
My clinical assessments of Christopher have shown that he is a bright, alert and interactive boy who is very co-operative and tries hard to carry out tasks, even when hampered by his choreo-athetosis. Characteristics such as determination and socialization skills are not rated in epidemiological studies but in my experience as a Clinician do significantly affect compliance with treatment and neurological outcome.
In my opinion therefore the best method of determining life expectancy of an individual with cerebral palsy is to combine their individual characteristics, with epidemiological data, rather than relying solely on the epidemiological data.”
Throughout, Dr Harbord has relied heavily upon the study published in 2000 by
Dr Hutton. There are two difficulties which I see in Dr Harbord’s use of that study. The first is that it is not clear that Dr Harbord’s various estimates of the probability of reaching age 30 can be reconciled with what appears in Table 3 of that publication. The second is that Dr Harbord has not referred to a subsequent publication by Dr Hutton, which is a publication yet more difficult to reconcile with Dr Harbord’s estimate of prospects of survival to age 30.
In Table 3 within Dr Hutton’s 2000 publication, there were figures representing the probabilities of surviving to certain ages, including age 30, for cerebral palsy sufferers having regard to certain characteristics. Amongst those were cognitive, manual and ambulatory disabilities, each of which was separated into categories of “severe” and “not severe”. Undoubtedly Christopher’s manual and ambulatory disabilities would be within Dr Hutton’s severe categories. The Table showed a 60.1 per cent chance of surviving to age 30 on account of a severe manual disability and a 63.3 per cent prospect on account of a severe ambulatory disability. For those with a cognitive disability which was severe, there was a 65.2 per cent chance, and for those with a not severe cognitive disability, a 98.5 per cent chance of surviving to 30. Dr Harbord said that he revised his estimate of Christopher’s prospects of survival to age 30 upon receiving information to the effect that Christopher had an average to above average IQ. The evidence of the psychologist Ms Ewing, is that Christopher’s IQ is “at least within the average range for general intellectual ability”, with his IQ score on certain tests being above average and below average on others. But this Table (published by Dr Hutton) represents the effect of certain disabilities on rates of survival, and indicates that the relatively poor survival prospects of someone with a severe manual or ambulatory disability are not significantly improved by that person having an average or above average intellect.
In this first report Dr Harbord seems to have increased the prospects of survival indicated by the Hutton publication for the fact that Christopher has choreo-athetoid cerebral palsy and not the spastic quadriplegic form. Yet he did not explain why that distinction would matter where there is a severe functional disability. He simply referred to what he said was Crichton’s finding that those with the choreo-athetoid type are likely to survive longer, without discussing, for example, whether as a group they have a lower incidence of severe disability. Dr Harbord emphasised the importance of intellectual ability or disability. Yet it is difficult to see what impact this had on his original opinion because, as he then wrote, he did not have information as to Christopher’s IQ. Overall, his original assessment of a 65 per cent prospect of survival to age 30 was a little more optimistic than the Hutton study would indicate, and the basis of that optimism was not persuasively explained.
In his second report, Dr Harbord placed particular reliance upon Dr Blair’s study. Dr Blair’s paper is in evidence although she was not called as a witness. As
Dr Harbord wrote, Dr Blair’s finding was that there was a low risk of death for people with a severe motor impairment but normal or near normal intellect. The defendant’s case is critical of the Blair study, saying that it demonstrates no justification for that finding. Professor Strauss cannot see its basis. As I read the Blair article the basis is not apparent. Perhaps it was reasonable for Dr Harbord to rely upon it to increase his assessment of Christopher’s prospects. But just how the Blair study indicates survival prospects approximating 80 per cent was not satisfactorily explained by Dr Harbord or any other witness.
Within any of the studies referred to by Dr Harbord, there is no quantification of the life expectancy of a group with severe functional but no intellectual disability. However that is provided by a more recent study by Dr Hutton, entitled “Effects of cognitive, motor and sensual disabilities on survival in cerebral palsy”, published in 2002. The cohort the subject of that study comprised all children with cerebral palsy born between 1966 and 1989 in a certain part of England, involving 1,942 children. That study again represented various survival prospects by reference to the characteristics of disabilities with ambulation, manual dexterity and mental ability, but added data for hearing and vision disabilities. Most relevantly for present purposes, it also contained a graphical representation of survival prospects for various combinations of disabilities, and provides a comparison of survival prospects for persons with severe motor disabilities between those who also have severe cognitive disabilities and those with little or no cognitive disability.
Dr Harbord agreed that this graph indicated that someone such as Christopher, with severe motor disabilities, normal birth weight and no cognitive disability, would have, as a two year old, about a 72 per cent chance of surviving to age 30. So it provides some support for Dr Harbord’s figures of 80 per cent or thereabouts given Christopher’s age. Professor Strauss says that this graph in the Hutton study corresponds with his own research. As it happens then, this more recent Hutton 2002 study, which Dr Harbord had not seen, provides substantial support for his evidence of Christopher’s chances of surviving to 30.
Two further steps in Dr Harbord’s reasoning must then be discussed. The first is his allowance of an additional 37 years should Christopher attain 30 years of age. The second is his reduction of two years for diabetes. Dr Harbord’s ultimate conclusion is not expressed in terms of an age to which Christopher is likely to survive; rather, he says that there is an 85 per cent chance of surviving to 30, and if so, he is likely to survive until 65. Obviously that is different from saying that at present, Christopher is most likely to survive to 65. Instead, on the assumptions of that 85 per cent chance, and that the mortality rate for his cohort group is constant between ages 10 and 30, the average (i.e. most likely) lifespan would be approximately 58 years (.15 (30-10) plus .85 x 65).
As already mentioned, Dr Harbord used data from an article by Professor Strauss (and Dr Shavelle) published in 1998 to estimate the additional years from age 30, and allowed “for the lifespan of Australian males to be five years more than United States males”. But in his April 2006 report for this case, Professor Strauss says that the difference, according to more recent statistics, is 2.6 years, not five years. And I also accept Professor Strauss’ comment that the figure of 2.6 years should be decreased because Christopher has a lower survival prospect than an average Australian male.
The basis for Dr Harbord’s estimate of two years as an appropriate allowance for diabetes is not apparent. He does not claim a particular expertise in diabetes. Nor does he base this estimate on any studies of life expectancy, and in particular any involving a group with both cerebral palsy and diabetes. There is no evidence, at least in this case, of that kind. As I will discuss, Dr Jack appears to agree that Christopher’s diabetes is a negative factor for his likely lifespan but does not venture any quantitative estimate. Professor Strauss feels able to do so, and says that there should be a reduction by at least five years. On any view of the evidence, the greater impact upon Christopher’s lifespan is likely to be his cerebral palsy rather than his diabetes.
Professor Strauss has a degree in mathematics and a doctorate in statistics. He is a Fellow of the American Statistical Association and is Emeritus Professor of Statistics at the University of California. His present occupation is Director of the so called Life Expectancy Project, which is conducted from San Francisco. That organisation started in the 1970s at the University of California in order to undertake study in issues of survival and life expectancy. He now has an extensive knowledge of medical literature and research relevant to life expectancy. But he has no qualification in medical science and he is unable to make any clinical assessment. He describes his current occupation as a medical researcher in the area of life expectancy.
His work makes extensive use of a database maintained by the State of California, which stores detailed records of every person who in consequence of a disability, has received some service provided by that State, such as medical care, therapy, board and lodging or respite care. Anyone receiving such a benefit from the State of California must be registered in the database and must provide information in response to questions about their skills, disabilities, medical problems, medication and other information. There are about 300,000 people on this register and the details are updated annually. This provides the Life Expectancy Project with information from which it can analyse the life expectancy of particular groups, and relevantly for this case, cerebral palsy sufferers. From the database Professor Strauss was able to identify 2,208 children with cerebral palsy evaluated at the same age as Christopher, and with the characteristics of not being able to walk or feed themselves, and who must be fed completely, but are not tube fed. The data for this group then provides death rates for the cohort over a period of 15 years: it can be seen that a certain number of the group died in one year and another number in the next, and so on. That mortality rate was then compared with the average mortality rate according to the standard Australian life table, from which the relative risk of death for the cerebral palsy cohort was computed. Professor Strauss said, without challenge, that it has been found empirically that from about the age of 30, the relative risk begins to decline at a consistent rate such that parity with the standard mortality rate would be reached (in theory) at age 100 years. This enables him to extrapolate mortality rates for those of the cohort who survived to age 30. Once there is this computation of mortality rates for the cohort across an entire lifespan, or in other words there is a calculation of how many of the group will die year by year, the average number of years of survival, or the life expectancy of the group, can be calculated.
Professor Strauss then made an allowance for the effect of diabetes. The result of the calculations within Professor Strauss’ original report (24 March 2004) was that the life expectancy within the cohort, which he says is appropriate in Christopher’s case, was a further 38.9 years beyond Christopher’s then age of 7.8 years (total 46.7 years). And without his allowance for diabetes, his calculation was 44 years beyond Christopher’s then 7.8 years. In other words he said that Christopher’s likely lifespan was reduced by a further 5.1 years because of his diabetes.
In his more recent report (10 April 2006) Professor Strauss calculated a revised life expectancy of (in total) 48.7 years, compared with the previous (total of) 46.7 years. This again took into account Christopher’s diabetes.
The principal attack upon Professor Strauss’ evidence is that he has not made, and cannot make, any clinical assessment of Christopher. Whereas Dr Harbord has made a clinical assessment, and has then worked from a statistical base to estimate Christopher’s individual survival prospects, it is said that Professor Strauss’ evidence is wanting because it is purely a statistical exercise, which is less reliable for the fact that the statistical information does not fairly allow for Christopher’s particular characteristics and circumstances. To some extent that argument has force. But it is not a basis for rejecting the entirety of Professor Strauss’ evidence. As Dr Harbord’s evidence illustrates, the foundation for some estimate of Christopher’s likely survival is the statistical information resulting from extensive studies of cohort groups which have much, if not everything, in common with Christopher’s case. Indeed Dr Harbord works from a premise as to adult survival which comes from some of Professor Strauss’ research. Professor Strauss has access to a large database of information which is surely relevant, and his experience and learning in statistical analysis, particularly in relation to life expectancy, is of very high standing. There was no challenge to the correctness of his evidence in terms of his application of statistical theory and methodology. Instead it was said that he was not qualified to define the appropriate cohort group for that analysis, because he did not have the medical expertise to identify the characteristics and circumstances of Christopher’s case which are significant for his life expectancy. That criticism was overstated. For example, amongst the extensive objections taken to Professor Strauss’ reports at the commencement of his evidence, it was submitted that Professor Strauss was not competent to say that a characteristic such as “no functional use of hand” is relevant to life expectancy. However other research, such as Dr Hutton’s work, does demonstrate the relevance of that matter and Dr Harbord, for one, did not suggest otherwise. So in saying that it is a relevant characteristic, Professor Strauss was simply referring to an uncontroversial fact.
It is argued that Professor Strauss should have focussed upon those persons whose cerebral palsy was of Christopher’s type, the choreo-athetoid type, and excluded from the cohort those with a spastic quadriplegic form. This was because in one of the publications apparently relied upon by Dr Harbord, a study by Dr Evans, it was suggested that those with choreo-athetoid cerebral palsy had a 15 per cent better survival rate. Professor Strauss’ view is that what is significant is not so much the cause or type of the cerebral palsy, but the nature and extent of the person’s disability. He did not demonstrate the factual basis for that view by reference to the details of other research. But nor am I persuaded that his view is incorrect. Some of the other studies in evidence, such as those of Dr Hutton, would seem to be consistent with that view. It may be that any difference according to the type of cerebral palsy can be explained by the higher or lower incidence of significant factors, such as functional disability, which are associated with one type rather than another. Overall, this point does not present a substantial reason for rejecting Professor Strauss’ analysis.
As Professor Strauss identified in his reports, there are considerations which could affect survival which he has not factored into his calculations. He identifies as positive factors for Christopher, his normal vision and hearing, his normal oropharyngeal function, his satisfactory weight, the absence of recent episodes of pneumonia or aspiration pneumonia, his cognitive function being equal to or better than the average among his cohort (where the relevant characteristic for the cohort was the absence of “severe or profound mental retardation”), that he has no scoliosis or orthopaedic problems and that he takes no medication other than for his diabetes. Negative factors identified by Professor Strauss were that Christopher’s speech is severely dysarthric (indicating dysfunction of the bulbar musculature) and his incontinence. These matters were not used in his computation because of the absence of sufficient data from the Californian register. Nevertheless, Professor Strauss said that the factors, taken as a whole, tended to increase the lifespan for Christopher from that according to his calculations. In his second report he wrote:
“It appears to me that the balance of positive and negative factors in Christopher’s case is more favourable than average among children with comparable physical disabilities. If so, some upward adjustment to the life expectancies reported here may be indicated. In my opinion, such an adjustment should not exceed 5 years.”
He acknowledges that his five year maximum in this respect is not a computed figure but was, he claimed, “a judgment of someone who works with these things quite a lot”. One further factor was suggested in the cross-examination of Professor Strauss, which is that Christopher is likely to receive a relatively high standard of care compared with the average for this cohort. Professor Strauss saw the difference between poor care and, on the other hand, average or better care, as significant but did not accept that the difference between average and good care would matter.
As to diabetes, Professor Strauss consulted a Canadian endocrinologist (who was not called as a witness) said to have expertise in the actuarial analysis of diabetes, and adopted his recommendation to assume an excess death rate of 200 per cent of general population mortality. Professor Strauss then referred to certain major conditions which may develop as a consequence of Type 1 diabetes and ventured the opinion that the rating of 200 per cent may be a serious underestimate of the risk. But he also referred to the availability of evidence suggesting the mortality risk of diabetes may be falling as a result of advances in treatment. And he speculated as to the impact of Christopher’s cerebral palsy upon the risks from his diabetes. I have no doubt that Professor Strauss was endeavouring to be helpful and fair in all of this. But he is not qualified to express opinions upon the likely quantitative effect on survival from diabetes. As he makes clear in his first report, he has worked from the opinion of an endocrinologist. If it be the fact, as Professor Strauss states, that an excess death rate of 200 per cent is consistent with actuarial practice in the business of life insurance, that fact does not establish that 200 per cent is an appropriate rate. Professor Strauss went on to say that “the latest literature” shows that the excess death rate is yet larger than 200 per cent, and he identified a particular paper but it was not put in evidence. His evidence about diabetes is markedly different from that in relation to life expectancy for cerebral palsy sufferers. In respect of diabetes, he has not undertaken his own statistical analysis but instead relies on what he was advised by an endocrinologist and what he says is another’s statistical analysis.
The endocrinologist who did give evidence, Dr Jack, does not accept that this 200 per cent excess death rate is appropriate to Christopher’s case. She believes that it is inappropriate because the prognosis and likely survival of diabetic patients is improving. She said that there is a marked reduction in complications because of improved diabetic control. She did not offer her own figure but said that if Christopher’s diabetes was well managed, his “background risk” would be “then approaching normal but not zero risk”. I am persuaded by Dr Jack’s evidence that Professor Strauss’ adoption of a 200 per cent excess death rate for diabetes was excessive. The “latest literature” to which Professor Strauss referred to was not put to Dr Jack. The overall impact of Christopher’s diabetes for the Strauss calculations is about five years, so that his figures require some adjustment, although as Dr Jack apparently agreed, some allowance must be made for diabetes.
Dr Martin Kennedy gave evidence in the plaintiff’s case. He is a specialist in rehabilitation, pain and palliative medicine and practises in Sydney. He gave evidence on a number of issues, including life expectancy. In his first report
(16 February 2005) he wrote:
“I do not anticipate there will be any alteration to Christopher’s life expectancy as a result of his cerebral palsy. With good diabetic control, Christopher can also expect to have a near normal life expectancy from this perspective as well.”
He referred to no literature or studies in those respects. In oral evidence he said that his opinion on life expectancy as a result of cerebral palsy was based on his experience with his own cerebral palsy patients. I do not find those opinions persuasive. His view about cerebral palsy is quite inconsistent with published studies, and in particular those discussed by Dr Harbord, and it is an inconsistency he could not satisfactorily explain.
The plaintiff also relies upon what was written in a report by Dr G Wallace, which was addressed to the defendant’s solicitors but ultimately tendered by the plaintiff. Professor Strauss had been sent that report and therefore referred to it in his first report. Dr Wallace said there that there should be no effect on Christopher’s lifespan from his cerebral palsy. In making that submission, the plaintiff’s counsel appear to have overlooked the basis upon which they agreed that the Wallace report could be tendered, which was that they would not rely upon the opinion within it but only as evidence of what was available to Professor Strauss (if that be relevant). In any case, I could not give it any weight against the evidence of witnesses who did give oral evidence, including the plaintiff’s witness Dr Harbord. And again, it is inconsistent with the published studies.
Assessment of lifespan
This issue of Christopher’s likely survival occupied a considerable time in the evidence and the arguments. There is a vast difference between the respective submissions on this issue. Ultimately it is argued for the plaintiff that his survival “should be of the order of 85% of normal which is a reduction of just under 10 years from 68.6 to 58.31 remaining years”, i.e. that he is likely to live to at least 68. The evidentiary basis for that argument is not apparent. The defendant’s argument is that an additional 38.6 years should be assessed, which is the most recent calculation of Professor Strauss.
I accept that the Strauss analysis has its limitations. In principle, the estimate of Christopher’s likely survival ought not to be simply a statistical exercise but should involve also a clinical assessment of Christopher’s individual health and circumstances. Accepting that proposition, nevertheless a clinical assessment does not ensure a precise and correct answer either. Yet for all of the time spent on this question at the trial, ultimately there is no substantial difference in outcome between the different approaches of Dr Harbord and Professor Strauss. That is not surprising for Dr Harbord heavily relies, correctly in my view, upon the information available from various published studies and most notably, publications of Professor Strauss.
Both Dr Harbord and Professor Strauss accepted the probative value of the Hutton studies and in particular the survival rates indicated by her 2002 paper. From the graph in that paper, it is possible to plot the number within the cohort group who will die between the ages of 10 and 30, and it can be seen that the rate of death is fairly constant within that 20 year period. So the graph would indicate that a 10 year old, within the category accepted as relevant by Dr Harbord, would have at least an 80 per cent chance of surviving to age 30. (The graph indicates about 90 per cent of the group alive at age 10 and about 72 per cent of them alive at age 30). Dr Harbord says that from age 30, the life expectancy is indicated by other studies of Professor Strauss. So subject to issues of diabetes and the extent of differences in survival between California and Australia, there ought be no marked difference in their respective analyses. For example, if Dr Harbord’s evidence is accepted in its entirety, save that his allowance for difference in death rates between California and Australia is reduced from five years to say three years (see paragraph 22 above), the resultant calculation is a survival to age 56.55 years (.85 X 63 years plus .15 X 20 years[2]). Alternatively, upon Dr Harbord’s previous estimate of an 80 per cent prospect of survival to age 30, the resultant figure would be 54.4 years.
[2]Average age of the 15 per cent dying between 10 and 30, assuming a constant death rate within that period
Against that evidence there is Professor Strauss’ calculation of likely survival to age 48.7, which should be revised upwards at least for two reasons. The first is the unquantified effects of the positive factors, as against certain negative factors, discussed above at paragraph [30]. In his first report, Professor Strauss said that as much as five years overall might be added for these matters. The second is that some adjustment must be made for the excessive allowance he made for diabetes. Once those two matters are considered, it can be seen that there is no substantial difference between these witnesses. So, for example, allowing four years overall for those other positive factors identified by Professor Strauss, and deducting say three rather than about five years for diabetes, would change the Strauss estimate of lifespan to about another 44.6 years, that is to at least age 54.
The submission for the plaintiff, that I should allow 58 remaining years, misunderstands the evidence. No witness, including Dr Harbord, said that Christopher’s survival quote should be of the order of 85 per cent of normal.
Dr Harbord said that he had an 85 per cent chance of surviving to age 30 and thereafter his survival would be diminished according to other studies of Professor Strauss.
In my conclusion I should assume a likely survival of an additional 44 years.
General damages
The plaintiff claims an amount of $300,000. The defendant argues that $220,000 should be allowed.
The plaintiff argues that reference should not be made to other awards, because “the plaintiff’s circumstances are quite unique and this would justify a wholly individual approach to the assessment of general damages”. The defendant’s argument does rely on other cases. It relies upon Castro v Hillery & Ors [2001] QSC 510 where a 36 year old plaintiff who suffered severe brain damage and physical injuries, and lost her ability to speak but had insight into her problems, was awarded $160,000 for general damages. It relies upon Goode v Thompson [2001] QSC 287 where a 12 year old boy who suffered very severe brain damage as well as orthopaedic injuries but had limited insight, was awarded $150,000. In Winterton v Mercantile Mutual Insurance [2000] QCA 249 a 14 year old plaintiff sustained severe brain damage and was awarded $200,000 by the trial judge which was reduced to $150,000 on appeal. The defendant also points to McChesney v Singh [2003] QCA 498 where a plaintiff suffered a major brain injury and orthopaedic injuries was assessed for general damages at $150,000, which was upheld on appeal. She was 17 when injured. And the defendant also cites Theden v Nominal Defendant [2004] QSC 310, although that involved at 41 year old plaintiff suffering tetraplegia, for whom general damages were assessed at $200,000.
It can be seen from those awards, most of which at least are relevant, that the sum claimed by the plaintiff is relatively high. Christopher has had his cerebral palsy for all of his life and he has insight. His case warrants a very high award for general damages. But I am not persuaded to award $300,000. The defendant’s submission of $220,000 is a reasonable one and I was told without any challenge that the highest award for general damages in Queensland to date has been $200,000. Accordingly I will award general damages at $220,000.
Interest on general damages
I will allow interest on $44,000 which is 20 per cent of that award for general damages. It is common ground that interest should be calculated at the rate of two per cent on that sum from Christopher’s birth. I will allow $9,000 interest on general damages.
Future care
For the rest of his life, Christopher will remain fully dependent upon assistance for feeding, toileting, bathing, movements around his house, travel, use of medication, procedures to manage his diabetes, and any form of physical exercise including stretching and massage. Even with the assistance of hoists, the task of transferring Christopher to and from his bed, wheelchair, bath and toilet will continue to be demanding, and is likely to become more so as he grows. Christopher will have the use of computers and other aids for his education and communication but his carers will need some level of competence in assisting him in those respects. They will also need training in the use of the insulin pump. Dr Jack said that would require about two three hour training sessions plus some follow up, and that the principal difficulty is in training a person to compute how much food the child has consumed so as to program the pump, although devices are now being developed where that will be computed by the device itself. Mrs Hills says that Christopher can sometimes but not always detect when his blood sugar level is low. He will be able to tell a carer that it is low, with the use of the communication devices he will have, such as that called the pathfinder. Dr Jack did not think that his blood glucose levels would have to be checked every night but sometimes this would be required. In any case, it is agreed that Christopher will need the attendance of a carer throughout the night.
On the evidence, if not in the submissions, there is no substantial controversy as to the required level of competence of a carer for Christopher. It is submitted by his counsel that Christopher will require “highly qualified, skilled, experienced, competent, sensitive and ethical carers”. As to what is that level of qualification, the plaintiff’s case relies upon the evidence of Ms Robertson, a director of the agency “Dial-an-Angel”, whose view is that the carers should be competent and experienced attendant carers, with experience in the manual handling of a disabled person, and should have a current first aid certificate, but they need not be qualified at the level of a registered nurse. She provided her company’s rates for carers trained at the level of an enrolled nurse, or what she described as a “level 3 disability support worker”. That is not an industry standard but is what
Ms Robertson described an “internal thing”, i.e. a comparative standard used within Dial-an-Angel to describe the relative difficulty of the particular assignment. It has 6 levels of which level 1 is the least demanding. So for her agency the rate of pay is determined by the degree of difficulty of the job rather than the qualifications of the carer. When asked to comment upon a report by the defendant’s witness Mr Hart, in which he discussed the appropriate level of qualification, she seemed uncritical of Mr Hart’s evidence in that respect.[3]
[3]Her report of 16 February 2006 commenting upon his report of 20 January 2006
Mr Hart is the principal of Quality Lifestyle Support Pty Ltd (“QLS”), which since 2000, has carried on a business based in Toowoomba of the provision of care services to disabled and elderly people. It operates upon what is called a managed care basis, meaning that it employs the carers and hires them out to the client.
Ms Robertson says that Dial-an-Angel sometimes provides carers upon this basis, but apparently it usually provides what she calls referred care, under which for a fee it refers a carer to the client who then becomes the employer. The difference is significant as I will discuss. But it is not significant for the appropriate level of qualification and experience of the carer.
In his initial report[4], Mr Hart said that a carer in Christopher’s case should have what he described as a “Certificate 3 in Community Service Work (Disability) or associated qualifications at the same or higher level” and “protective practices and behavioural support training or associated training”. All carers employed by QLS are vetted by checks with the police and in the case of child carers, a requirement for what is called the blue card. He says that those requirements and qualifications “are viewed widely as the standard required by the sector”, but that additional skills would be required in Christopher’s case which would be gained through “in-house individual training with the client utilising a professional advisor or trainer”. He described that further training as follows:
[4]31 August 2005
“1.W.H.S., Medication, systemic procedures and policy training (provided at staff induction to Q.L.S.)
2.Hoist and specific equipment training (provided by professionals associated with the specific equipment).
3.Advance resuscitation training (provided by St John’s or organisations such as CABB Australia Pty Ltd).
4.Diabetes management training (normally on an individual case basis by the treating Physician).
5.Support plan implementation training with the relevant service Coordinators in conjunction with treating physicians such as Dr Geoff Wallace.
Training component:
It is often necessary for Q.L.S. when undertaking a support situation as described for Christopher, that additional training time be allowed for on site training. This can vary dependent upon requirements, however, in a similar situation support by Q.L.S., the allocation of five double up shifts per support person have proven sufficient. Given that current retention rates are about 2 years per employee a team of say six individuals would require 15 additional shifts per year.”
In a later report[5] he described the necessary qualifications and training in these terms:
[5]20 January 2006
“Although the responsibilities for monitoring and reacting to Christopher’s needs with regard to diabetes are high and at times stressful, this does not constitute the requirement of trained medical staff. A number of individuals supported by disability support agencies including Q.L.S. are provided with paramedical type support such as oxygen administration, rectal medication, gastro nasal and peg nutrition.
In Christopher’s situation training would have to be conducted specifically around the use, maintenance and monitoring of the insulin pump, as well as blood glucose monitoring (pinprick testing). This training is able to be provided by CABB Australia Pty Ltd at a cost of $75 per hour. Q.L.S. continues to contract this service for other service recipients and is provided with excellent training and scrutiny by Terri-Ann Nesbitt CA RN MRCNA Dip App Sc (N) B Ed (AWE). Currently family support this area of Christopher’s life without formal medical qualifications.
However supporting individuals, would require as standard, the competencies of a level 2 support person pursuant to the Q.L.S. enterprise Agreement
Senior first Aid
Advance resuscitation
Specific disability training with regard to Cerebral Palsy
Hoist and transfer training
General diabetes training and advanced specific training for the individual client.It would be an advantage for a consultant who specialises in diabetes training, to be retained to regularly monitor technique application amongst support staff. In similar situations monthly consultations for a period of 1 hour plus on site checking of 2 hours is usually sufficient for a team of six to eight, the size required to provide care in a high level support model.”
Ms Robertson says that her organisation is especially demanding, and selects only a small proportion of those who seek work through it. It was strongly suggested to Mr Hart that his organisation is not so demanding, and that this explains why the QLS charges are lower, in some circumstances at least, than those of Dial-an-Angel. I am unable to assess whether QLS would engage some people whom
Dial-an-Angel would not. But if QLS requires its carers to meet the standards described by Mr Hart, then the market rates for their services are probative, regardless of the suggested comparison with Dial-an-Angel. It was also suggested that QLS has an unduly high rate of staff turnover. Mr Hart denied that, giving evidence that the QLS turnover of about 30 per cent a year corresponded with that in the industry. I see no reason to reject that evidence.
The ultimate argument for the plaintiff is that I should reject Mr Hart’s evidence because, it is said, the QLS charges, the amounts which it pays to its carers, and the suggested high turnover of its staff indicate that it will not be able to provide appropriate services at its present charges over the long term. Yet QLS has been in business for about six years. Most of its income seems to come through schemes administered by the Queensland or Commonwealth Government, as well as from what Mr Hart describes as self funded clients. As a service provider to Disability Services Queensland, QLS is required to adhere in the payment of its staff to the Disability Services Award or the Social and Community Services Award. It currently supplies carers for about 100 individuals in various locations around Ipswich, Toowoomba and South West Queensland, averaging about 5000 hours of support per week. About 30 of its clients are receiving care 24 hours a day from QLS. It has between 90 and 100 employees. I am far from persuaded that its present pricing is not sustainable, or that its prices do not evidence the market price for relevant care.
The relevant enquiry is not whether Christopher’s carers are likely to come, or ought to come, from one organisation or the other. That is because the damages to which Christopher is entitled are not to be determined by reference to whether he will pay, or if so, what he will pay, for his care, but according to the reasonable value of that service which ordinarily is measured by the price for which such a service is supplied in the relevant market: Van Gervan v Fenton (1992) 175 CLR 327 at 334-335. In the market relevant for this case, QLS appears to be a substantial participant and its prices are probative of the market cost. As most of its fees are funded by Disability Services Queensland, which would be expected to be an informed and perhaps the largest consumer in that market, its prices are likely to fairly indicate the market cost of what is called managed care. As I will discuss,
Ms Robertson’s organisation would charge much higher sums at least for managed care, although its rates for referred care might not be much different from the cost of managed care through QLS. But if the QLS rates were significantly below the rest of the market, that could have been demonstrated easily enough.
In my view Mr Hart’s evidence ought to be accepted as proof of the cost in the Toowoomba market of the care which he suggests. To the extent that a higher figure would be charged by Dial-An-Angel for care provided upon an equivalent basis, I am not persuaded that the market cost should be assumed to be that higher figure.
The cost of care varies according to the length of the carer’s shift. The effective hourly rate is higher for an 8 hour shift than for a 12 hour shift. There is a considerable debate about the length of shift which would be appropriate here. Ultimately the plaintiff’s case seems to accept that a carer could work a 12 hour shift through the night. Mrs Hills, for example, agreed with that. But it is said that the burden during the day would be too great for a 12 hour shift so that some “care model” involving shorter and relatively more expensive shifts would be appropriate. The defendant’s case is that the assessment should assume shifts of 12 hours.
I have described already the demands upon a carer for Christopher. The work would be physically demanding and require a high level of concentration. No witness seems to suggest that an eight hour shift would be too much, but some say that a 12 hour shift would lead to work ‘burnout’ for at least some carers. The witnesses on this issue fall into three groups. First there are Mr and Mrs Hills, who understandably have the greatest knowledge of what Christopher’s day to day care involves. The fact that they have managed to provide his care to date is not to say that a 12 hour shift is realistic. Mrs Hills has described the burden of Christopher’s care at times would become too much for her, and that she would have to move out of the house for short periods to recover. Unlike Mr and Mrs Hills thus far, a professional carer would have the advantage of a break at the end of a shift. And the carer would not have the burden of looking after Christopher but at the same time managing the entire Hills household including another child. So Christopher’s parents’ assessment of what professional carers could manage is relevant but not necessarily correct. Secondly, there are Ms Robertson and Mr Hart. Because of their extensive experience in the provision of care services, and the employment of carers, they are well qualified to offer opinions as to what carers could manage. Thirdly, there are some other witnesses, who work as occupational therapists or social workers, and whose work has allowed them to see the provision of care in comparable circumstances. But they who do not have the vantage point of those whose business it is to employ carers and to allocate work to them.
On the face of their respective reports, there is no difference between Ms Robertson and Mr Hart on this point. In her report of 27 January 2006, written with the benefit of reports from amongst others Ms Stephenson, occupational therapist, and with the benefit of a DVD which shows a typical day in the care of Christopher in his house, Ms Robertson was asked to advise on an appropriate care ‘model’. She wrote:
“You have asked us to indicate the type of care model that we would set up with Christopher. There are many different scenarios of care available but we recommend 2 X 12 hour shifts per day on an ongoing basis either on a referred or managed care basis. The day time shift is likely to be fairly intensive and demanding. The 12 hour overnight shift wouldn’t be as demanding as the day shift but carers would not be able to sleep. Christopher’s blood sugar levels would need to be checked as well as the need to roll/lift and turn him every few hours and ensure he is kept comfortable. Mr and Mrs Hills currently attend to Christopher up to four times each night.”
In his first report Mr Hart discussed three alternative models. Under what I will call his first model, the work would be shared between professional carers and Christopher’s parents, which he said would allow “for the family to still be responsible for adequate levels of support for Christopher, alleviating the intrusiveness that occurs with having high levels of support worker engagement within the family home.” Under the second of his models, there would be two 12 hour shifts each day, performed by a team of six or seven paid carers which he says would provide for “adequate rotation and backup staff”. It is this model which he would recommend once Christopher chooses to live independently of his parents. His third model involved 24 hour shifts, which he said had some advantages – it is cheaper than the second model but which he seemed not to prefer. In a subsequent report, he revised his second model to provide for effectively 25 hours per day, so that there would be some work done at times by two carers on the change of a shift. Under his second model, the night time carer would stay awake to be able to immediately respond to Christopher’s needs. The result is that Mr Hart agreed with Ms Robertson’s report that a model of two 12 hour shifts would be the most appropriate, if and when Christopher is cared for entirely by paid carers.
In that third category of witnesses is Mr Kennedy-Gould. His qualification is as a social worker and he has some decades of experience in work with disabled people. By the time he retired from the New South Wales public health system, he was the most senior social worker working in mental health services. Since then he has been a social worker in private practice, which he describes as “a multi-disciplinary practice specialising in medico-legal work” with work that includes “provision of case management services to solicitors undertaking litigation on behalf of brain injured clients involving referral, follow-up and family and individual counselling”. His practice also includes individual and family counselling for clients with acquired brain injury and he “assesses and reviews approximately 250 clients each year suffering the range of intellectual disabilities, many with the complications of severe physical disability.” That involves his recommendation of “appropriate accommodation and care packages”. I accept that his experience makes him competent to express an opinion about the chances of carers being able to work 12 hour shifts. But his experience for this issue is not as valuable as that of
Ms Robertson and Mr Hart, who are in the best position to assess the demands and effects upon carers, because they employ them. Mr Kennedy-Gould said that an eight hour shift was appropriate. He agreed that he gave evidence, in another case involving a comparable plaintiff[6], to the effect that carers could well work 12 hour shifts. But he said that his more recent experience has changed his mind. Accepting that is so, his evidence should not be given the weight of Ms Robertson and Mr Hart on the point.
[6]Simpson v Diamond [2001] NSWSC 925
Another witness within this third category is Ms Stephenson. In her report of
5 July 2004 she wrote:
“Christopher Hill’s care requires the carer to be closely monitoring him at all times for his safety. This highly focused care requires extreme responsibility, focus and attention which over time is very draining. For this reason, it is considered that future care would be best provided for by a team of approximately six carers minimum, working in rotating shifts of six to twelve hours per day.”
(emphasis added)
In her report of 9 November 2005, Ms Stephenson said that 12 hour shifts would be acceptable at night but not during the day, when the maximum should be eight hours. I do not accept the defendant’s argument that she qualified that opinion when saying, in cross-examination, that 12 hour shifts were not “ideal” or the “optimal situation”. She continued to express reservations about the ability of carers to work 12 hour shifts. Her evidence as an occupational therapist has weight but again she does not speak from the specific experience of Ms Robertson or Mr Hart.
In reality, there would be some carers who could work a 12 hour shift and some who could not, although being well qualified, experienced and otherwise competent. It is appropriate, in my view, to work from the premise of two 12 hour shifts, with the addition of one hour per day as Mr Hart suggests, and with some adjustment for the fact that from time to time, through the practicalities of rostering carers, there would be some shorter shifts.
The defendant accepts that I should assume that Christopher will live independently from his parents, and from that time will require a 24 hour care according to
Mr Hart’s second model. It argues that I should assume Christopher’s independence from age 21. Each of those assumptions is realistic and I will make them. For the plaintiff it was argued I should assume independence from age 18 but I think that that is less likely in Christopher’s circumstances.
The defendant argues that I should assess the need for care from now until age 21 on the basis of Mr Hart’s first model. It is for eight carers on 12 hours shifts Monday to Friday from 7:00 am and 3.5 hour shifts on those days from 7:00 pm. On Saturdays paid carers would work 7:00 am to 10:00 am and 5:00 pm to 10:30 pm and on Sundays a 12 hour shift from 7:00 am. Outside those hours Christopher would have his parents and other family members to look after him. But for those periods of unpaid care, the defendant’s argument is that only one hour per day should be allowed. The plaintiff’s case is that I should allow for 24 hour care because “it is envisaged that Mr and Mrs Hills will very soon cease to be his carers and engage a case manager to employ carers”. Undoubtedly Mr and Mrs Hills will engage paid care to some extent with the benefit of Christopher’s award. But more probably than not the position will resemble Mr Hart’s first model. It is unlikely that Mr and Mrs Hills would quickly hand over all of the care for Christopher, especially as they have no experience of a regime with a paid carer in the house, let alone on a 24 hour basis. Mr Hart’s first model appears to be a sensible balance between Christopher’s being cared for most of his waking hours by paid attendants and his having time with his family without the intrusion of the carer. But why does it matter whether Christopher’s care will be according to Mr Hart’s first model or instead his second model?
In Mott v Fire and All Risks Insurance Co Ltd [2000] 2 Qd R 34, a majority of the Court of Appeal held that a claim for the need for future care should be the subject of findings by a trial judge as to how much of that need is likely to be satisfied by paid carers and how much by unpaid carers. Their Honours so held upon a construction of s 16(1) of the Supreme Court Act 1995, (which requires a discount rate of five per cent), by which it did not apply to an assessment of care likely to be provided gratuitously. For that component, a rate of three per cent is to be applied.
The defendant argues that the distinction between paid and unpaid care is also relevant because I should value the unpaid care provided by Mr and Mrs Hills at less than the market cost of paid care. That was said to follow from what Williams JA (with whom Davies JA and Wilson J agreed) said in McChesney v Singh & Ors [2003] QCA 498. But Williams JA did not hold that the services were to be valued differently according to whether they would be provided gratuitously, and that distinction would be inconsistent with Van Gervan v Fenton. In McChesney the gratuitous services were valued at less than a commercial rate because they were, in the circumstances of that case, found to be less demanding upon the carer than those for which the commercial rate would be charged. In the present case, there is no such distinction. The quality of the care which is likely to be provided by
Mr and Mrs Hills, or by Christopher’s grandparents or his uncle, would be at least equal to that which would be provided by a paid carer. Nevertheless, at least for the reason of the different discount rates according to Mott, it is necessary to make findings as to how much of the burden will be borne by unpaid carers.
I accept that I should assess on the premise of Mr Hart’s first model which is the most likely arrangement until Christopher leaves home. Under that model, Christopher’s need would be met at times by paid care and at all other times by gratuitous care. Yet the defendant argues that only seven hours per week should be allowed for gratuitous care, although Christopher would be in the care of his family every night, for most of a Saturday and on a Sunday evening. The defendant’s argument is that during those hours, and in particular on a Saturday, “full care” should not be allowed because “in that time the parents are being parents and Christopher’s being a child”. It was argued that “we don’t compensate the parents for being on standby in their own home as if they were an alert commercial carer. They are, in fact, living as a family unit”. The argument is that when Christopher would be with his parents, they would be providing “occasional snippets of care for which there should not be compensation as if they were professional carers being paid for their presence as well as their particular efforts”.
There are two issues involved in that argument. The first is the extent to which Christopher requires care in the relevant sense, i.e. care which results from his cerebral palsy (including the problems in his diabetic management from his cerebral palsy). Children who are not disabled require care and in their early years on a 24 hour basis. As they grow up they need less care although they still have to live in the protection of the family household. It is the extent to which Christopher has required, and might still require care beyond that which would be necessary if he were not disabled which is the need which is to be compensated. At his present age of 10, if Christopher was not disabled he would still require the care of his parents but obviously not to the same extent. If some of the time allowed under Mr Hart’s model is no more than the parental care which Christopher would require if not disabled, then it is not compensable. A 10 year old boy without Christopher’s disabilities would require parental care, and on a diminishing basis over the next few years. But because of his disability he needs the presence on a 24 hour basis of people who are able to attend to his care.
The other issue raised by this submission is whether it is appropriate to compensate Christopher by reference to commercial care rates where the care would be provided by his parents whilst at the same time they did other things around the house. Christopher needs the full time attendance of carers but not their personal exertion for every minute they are there. The description of “occasional snippets of care” understates what is required, but I accept that whilst Mr and Mrs Hills are looking after Christopher, they will be able to do other things to some extent. The argument then is that as “gratuitous carers in their own home going about their own business” they should be “compensated for those occasional snippets, not being for 24 hours”. That argument is inconsistent with principle, and in particular with Van Gervan v Fenton. This is not an assessment of compensation for the parent’s efforts, but of Christopher’s loss which is his need for care which he would not need but for the defendant’s wrong. He needs the presence of someone, 24 hours a day, who is able to immediately respond to his various requirements.
In the assessment of that loss, it is irrelevant to inquire whether he is likely to pay anything for that service or what would be paid. The assessment is one of the “reasonable and objective value of the need for those services” for which, as a general rule, the market cost is the measure[7]. But in some cases the market cost may be too high to be the reasonable value of the services and in Van Gervan, Mason CJ, Toohey and McHugh JJ instanced the cost of providing services at a remote location where the cost is much greater than the equivalent in a densely populated area or where there was so little competition that, judged objectively, the market cost was not the reasonable value of the services[8]. But nevertheless the exercise is one of valuing the service which is needed by the plaintiff. There is no difference between the required services according to whether it is Christopher’s parents or a paid carer who there is to provide them. And there is no difference, for example under Mr Hart’s first model, between the required care on a Saturday afternoon (to be provided by the parents) to that required on a Sunday afternoon (to be provided by the carers). This is not a case where it can be said the market cost is an inappropriate measure of the value of the care, because as the defendant indeed argues, the value is to be measured by the market cost evidenced by Mr Hart’s rates. So the assessment of the value of the required care must be by the consistent application of market cost whether the care is likely to be provided by the market or not. The fact that Christopher’s parents will be able to do some other things in the house whilst caring for Christopher does not diminish the value of the care they are providing.
[7]Van Gervanv Fenton 175 CLR 327 at 333
[8]175 CLR 327 at 334
Accordingly, although I will assess Christopher’s future care needs for the next 11 years (to aged 21) on the basis of Mr Hart’s first model, I will allow the same rates for gratuitous care as for paid care. That does not mean that I will allow for every hour where there is no paid carer in attendance, because there must be some consideration of what care would be required if Christopher were not disabled.
That last point is the subject of a substantial dispute in relation to the claim for past care and it is convenient to discuss it now. The particulars of the plaintiff’s case accepted the proposition that Christopher could recover only to the extent that he required care at times at which he would not have required care if not disabled. At the trial however the plaintiff’s case for past care was advanced in this way. Detailed evidence was given, in particular by Mr and Mrs Hills, as to the high demands upon them from having to care for Christopher and specifically to the effect that a certain amount of time spent in the care of Christopher was far more demanding than the same time in the care of, for example, their other child. In general, that is undoubtedly correct, although there might be some question about the detail of this evidence, given its apparent inconsistency with what they had told Ms Stephenson for the purposes of her report. But the point of principle is whether that difference in the extent of the burden upon the carer, within a given period of time, represents a compensable loss suffered by Christopher. For example, children less than, say, two years old require the presence of some responsible person at all times and need active assistance throughout the day in very many activities. They need full time care. But the plaintiff’s proposition is that Christopher required more intensive full time care, and that he should be compensated for the difference.
In my view the plaintiff’s argument should be rejected. Again, this argument appears to mistake the position of the carer, in this case the parents and what would be a reasonable allowance for that carer with the question of whether the plaintiff needs to be cared for because of the defendant’s negligence. The plaintiff’s proposition has been rejected in several cases: see Rotumah v NSW Insurance Ministerial Corporation (unreported, Supreme Court of NSW, 6 April 1998); Ren v Mukerjee (unreported, Supreme Court of the Australian Capital Territory,
12 December 1996 and Simpson v Diamond [2001] NSWSC 925.
For a 12 hour shift the QLS charge is $211 (equivalent to $17.58 per hour). For the 3.5 hour shifts recommended by Mr Hart, the rate would be $29 per hour as it would be for the extra one hour allowed in his model of two 12 hour shifts. He has also estimated $4,500 per year for training of carers. This is upon the basis of $75 per hour which is charged for training by an organisation independent of QLS, which is CABB Australia Pty Ltd. It is also on the basis of an assumed staff turnover rate in Christopher’s case of 50 per cent which is higher than QLS’s average rate of 30 per cent. This would cover specifically the cost of training in the management of his diabetes.
The Dial-an-Angel rates are on the basis of referred care, i.e. where the carers are employed by the client. In her first report Ms Robertson quoted $213 per 12 hour shift for week days, changing to $233 on weekends, and representing an average of $18.22 per hour. This was on the basis that the carers would be employed on a casual, not a permanent, basis. It includes the Dial-an-Angel commission of about $33 per shift resulting in the carer receiving $15 per hour. Ms Robertson says that penalty rates for holidays are “normally discussed and agreed upon prior to the engagement of the worker” and there is also the cost of WorkCover insurance which she says would cost only about $12 per year as long as the carer involved earned less than $98 per week. Otherwise the client as the employer would be required to register as a group employer. A worker who works more than 30 hours per week would also be entitled to superannuation at nine per cent from the client. If there is a team of six or seven carers, as Mr Hart suggests, then on average a carer would work less than 30 hours per week.
The defendant called Ms Williams, who operates a travel business that manages groups of travellers who are disabled. She is a former nurse. She says that Christopher is able to participate in specialised group holidays through her firm. She says however that Christopher would require a carer on a one on one basis which attracts a surcharge of approximately 75 per cent of the tour price. The prices of her coach tours within Australia range from about $1,000 to $1,500 for a 3 to 5 day tour. A fly-coach tour within Australia to, for example, Hamilton Island for five days, is $2,995 and to Perth for eight days is $7,999. Group tours to, for example Hong Kong or New Zealand, cost $7,999.
I do not think that it is appropriate to assess Christopher’s claim here on the assumption that he would participate only in group travel. There is some prospect that he would do that which warrants some adjustment to what is otherwise an appropriate figure. But in general he is likely to want to travel with his own carers and to have the independence of travelling alone, especially if he is going overseas to see relatives.
The claim here is excessive for a number of reasons. The first is that the assumptions which underlie it are unrealistic in my view. I do not think that his award should be calculated upon an assumption that he will in each and every year have a holiday in which he travels by air. It is more realistic to assume that he will make such a trip no more than once every three years. He is more likely to take holidays at a beach within driving distance of Toowoomba where he will be able to stay with his parents and/or carers in a rented apartment. In that respect he will incur no cost until he is living independently of his parents or at least until he is 18. Mr Cook has compared the price of business class fares to Australian capital cities (and also Cairns) with the cost of a restricted economy fare from which he says that the average is $1,873.28 for a business fare as against $628.14 for the economy fare. The claim is then made on the basis of the difference between three business fares of $1,873.28 each, and one economy fare of $628.14, which is a difference of $4,991.70. The claim is put upon the basis that both Christopher and two carers travelling with him must fly business class. I do not accept that premise. I do accept that it is reasonable to allow a business class fare for Christopher on lengthy international flights but for domestic flights Christopher ought to be able to fly economy class, with the assistance of his carers, just as he has already on a trip to Sydney with his father. Allowing two carers to accompanying him, that involves an extra cost $1256.28 (2 x $628.14).
Mr Cook compared standard accommodation costs in Australian capital cities with the cost of accommodation suitable for disabled persons. He says this involves a difference of on an average $132.57 a night or $1,855.98 over a fortnight’s holiday. He then adds a second room at the same price for the second carer. I accept the defendant’s argument that it is more realistic to assess the accommodation costs upon the premise that when travelling within Australia Christopher and his carers would rent an apartment. This would have the advantage of the two carers each being close at hand to assist with Christopher’s transfers and other needs. I will allow an extra $500 per week, or $1,000 for the fortnight, for the extra cost of a larger apartment to accommodate three people rather than just Christopher.
Mr Cook says that the additional meals required for two carers would cost (over 14 days) $2,521.96 ($90.07 per carer per day). I think that is excessive. Many of the meals are likely to be cooked by the carers in the apartment. Allowing, say $50 per carer per day results in an extra $1,400. With the addition of $1,256 for air fares and $1,000 for extra accommodation I will assess the extra cost of a two week holiday within Australia, when this involves air travel, as $3656. On the basis of that being incurred every three years, the equivalent weekly sum is $23.43. Calculated over 36 years (from Christopher’s 18th birthday) and deferred for eight years that amounts to $14,036.
For the more common holidays taken at a local beach I will not make an allowance for extra meals. Christopher and his carers are unlikely to eat out more there than at home. The context is somewhat different from, for example, staying in the centre of another city where the carers would not have Christopher’s vehicle, so that home cooking might be more difficult. I will allow something for the need for larger accommodation, although the difference for beach apartments. Allowing $800 for that, for 2 years of every 3, the difference equates to a recurring cost of $10.25 per week. Over 36 years and deferred for 8 years, that is $6,144.
Turning to the claim in relation to international travel it is not reasonable to assess damages upon the premise of an overseas holiday every five years. The defendant says that overseas travel would be a once in a lifetime event. That probably understates the position. It is fair to assume that he will have three such trips and I will assess on the basis that they are taken when he is 25, 35 and 45.
Mr Cook has collected information on business class return fares to various cities in Europe, Asia, America and New Zealand. He has also collected economy fares for the same destinations. But significantly they are economy fares without restrictions. The average of those economy fares is $6,792. For example the unrestricted economy fare to Europe is said to be $9,826. It is quite unrealistic to adopt that fare (as the fare for a second carer flying economy whilst the other carer flies business class with Christopher). I accept that the loss should be calculated upon the basis that Christopher and one carer fly business class but the other fare should be assessed upon the more common basis of a restricted fare.
The fares given by Mr Cook have no doubt been faithfully extracted from certain quoted prices but they do seem to be high. For example, he uses $15,603 for a business class return fare to the USA and $13,285 for a return fare to Europe. I will instead adopt $6,000 as an average business class fare to those various destinations (which include e.g. Auckland) and $2,000 as the more relevant average economy fare to those same places. This means that Christopher would be spending an extra $4,000 for his having to fly business class internationally, the cost of one carer flying business class with him at $6,000 and another flying economy at $2,000.
Mr Cook has said that the average restricted economy air fare is $2,198.37. But I will adopt $2,000 because Christopher and his carers would be more likely to obtain a lower fare by being able to book well ahead (through Christopher’s not being employed) and being able to travel at the less busy times.
Mr Cook has then calculated the cost of accommodation for two carers (but not for Christopher), when travelling overseas for 21 days, as $18,740. Again I am not persuaded that that is a reasonable estimate. At least one of the carers would occupy a room with Christopher so the cost is effectively one extra room. On
Mr Cook’s estimate the cost is $446 per day per carer. I would allow instead effectively an extra room plus some extra charge for the room occupied by Christopher for the carer’s use of it. It is reasonable I think to allow an extra $500 per day which over 21 days is $10,500.
As for meals overseas, Mr Cook says that $90 per carer per day should be adopted, which comes to $3,780 for two carers over 21 days. I will accept that figure. The extra costs I will allow for an overseas trip are then $12,000 plus $10,500 plus $3,780, which is in total $26,280. Deferred for 15 years that is $12,640, deferred for 25 years it is $7,748 and for 35 years it is $4,764. The total of those three figures is $25,152. I will allow $24,000 for the extra cost of overseas travel having regard to the prospect that Christopher might take up the cheaper alternative of group travel.
The result is that I will allow $44,180 ($14,036 + $6,144 + $24,000) for the extra cost of travel.
Case Management
The plaintiff’s claim here is $331,980, which is the present equivalent of $330 per week over 58 years. That weekly figure is for a so-called case manager at $150 per hour plus GST for an average of two hours per week. The claim relies most heavily upon the evidence of Mr Kennedy-Gould, a social worker.
The specific tasks of this case manager, according to Mr Kennedy-Gould would be that in consultation with Christopher’s parents and eventually his sister, the case manager would attend to:
“1.The development of care plans and associated recording systems however as well as care protocols e.g. emergencies, skin care, exercise, manual handling and activity, leisure and education programmes … a case manager would be required to ensure that all staff working with Christopher are aware of occupational health and safety requirements (applying to them) and competent in the use of appropriate technology and assistive devices.
…
2.The recruitment, induction and ongoing supervision of staff according to the above protocols. This would involve arranging education of all necessary specialist staff to ensure best clinical practice in Christopher’s care.
3.To ensure the implementation and review of all medical and allied health therapies.
4.(The performance of) an essential role in ensuring that there is regular flow of information between all those involved in Christopher’s care whether clinicians or personal carers.”
The appropriate qualifications for this person, according to Mr Kennedy-Gould, are:
“Qualifications in the fields of social work or occupational therapy with extensive experience in the field of acquired brain injury and the complex sequelae of medical conditions such diabetes and… demonstrable expertise in clinical skills and theoretical currency.”
Other witnesses, including Ms McNamee, who was called by the defendant, agreed that some case management was necessary. But there were different views as to how much was required and as to the necessary level of qualification of the manager. Mr Kennedy-Gould suggested two hours per week, as the plaintiff claims. Ms Stephenson suggested five hours a week but said that the necessary qualification was much lower, so that rather than the manager being paid $150 per hour (Kennedy-Gould) the hourly rate would be about $30. Ms Robertson, suggested four hours for the first four to six weeks and then two hours per fortnight or four hours per month thereafter. She said the cost of a visiting case manager provided by her agency is $150 per hour and as to their qualifications, that “they are often registered nurses or people who have worked extensively in social work, rehabilitation or other medical fields”. Dial-an-Angel charges $79.50 per hour (for the first two hours followed by $26 per hour thereafter) for the attendance of a nurse. In her report, Ms McNamee said that one to two hours per fortnight would be sufficient but in cross-examination she agreed with a figure of two hours per week.
The defendant argues that there should be either no allowance for case management, or else an allowance calculated at one hour per week at $30 per hour and then discounted for the prospect that Christopher’s parents will carry out this role.
Mr Hart said that the QLS rates include the provision of case management services. QLS currently employs two co-ordinators with “higher level” qualifications, who have a responsibility in the co-ordination and training of the carers. He said that in a 24 hour care regime such as this, case management of this kind could involve up to six hours of (included) co-ordination per week.
I have earlier concluded that a regime of managed care and not referred care, is more appropriate in Christopher’s case and I have assessed the cost of future care upon that basis. That is relevant to the present question. Much of the work of a
so-called case manager would involve the co-ordination of carers. Under a regime of managed care, that work is largely done by the agency, which is one reason why it is more appropriate for Christopher’s case. On the other hand, one of the reasons for a case manager is to have the help of a person, who is independent of the care agency, so that Christopher can receive independent assistance and advice in his dealings with the agency. Because Christopher will be so dependent upon the individuals who provide this care, and upon the agency which provides those carers, he will be especially vulnerable to conduct which is not in his best interests and he needs the support of an independent person to take up his cause if he feels that something is awry.
I am not persuaded by Mr Kennedy-Gould’s opinion as to the required qualifications of this person. Christopher will have the services of other health care professionals, to whom he can go if and when they are required. I do accept that the case manager should be better qualified than the average carer, notwithstanding
Ms Stephenson’s view. A registered nurse is an appropriately qualified person in my view. He or she would have the necessary professional training to understand the range of medical and health services available to and likely to be required by Christopher. And regular visits by a registered nurse would also provide the nursing assistance as discussed earlier. Yet Mr Kennedy-Gould rejects the suggestion that a nurse could perform this role. He says that his experience with nurses as case managers has been that there is “a tendency to set up a clinical regime rather than a home care regime” and that “the great task of a case manager is to prevent or militate against the development of a mini-institutional situation”. I am not persuaded by his evidence in that respect. Two things must be kept in mind. For all of the difficulties there are and will be in Christopher’s life, he has no cognitive disability and is at least of average intelligence. Secondly he will be able to communicate, orally and by his computer. As an adult he will largely be able to manage his own affairs, including his health care. He will need the assistance of an independent person, acting as his so-called case manager, to facilitate his dealings with his care agency and with other assistants. A registered nurse could well perform that role and his or her regular visits, as I have said, would have the advantage of providing regular nursing attention.
The defendant argues that any award should be discounted for the prospect that Christopher’s parents will perform the role. Whilst Christopher is living at home he will not require a case manager because he will be less vulnerable in the sense which I have described. The involvement of his parents and in all likelihood his sister and other family members as he lives independently will also tend to reduce the prospect that he will be improperly treated by a carer or an agency. That is not to say that I would assume his parents will act as case managers so that he will not have any need of this kind.
Under a regime of managed care, he should need no more than two hours per week on average of case management. I will adopt Ms Robertson’s rates for a registered nurse of $79.50 per hour. Calculated from when Christopher is 21 and deferred for 11 years, that equates to $79,580. For the next 11 years I will allow something for the attendance of a registered nurse. Allowing one hour per fortnight over 11 years results in $17,649. I will allow in total for a case manager, and nursing care the amount of $97,229.
Out-of-pocket expenses
Out-of-pocket expenses have been agreed at $60,000 and interest on them at $15,000.
Funds management
Section 59 of the Public Trustee Act 1978 (Qld) provides that no money or damages recovered or awarded in respect of a claim by a person under a legal disability should be paid to any person other than the Public Trustee unless the court otherwise directs[21]. It further provides that all money or damages so paid to the Public Trustee shall, subject to any general or special direction of a court, be held and applied by the Public Trustee on trust for the person under a legal disability and that the Public Trustee then has the powers there expressed.[22] If Christopher’s award is paid to the Public Trustee pursuant to s 59, the Public Trustee is authorised to charge fees and charges fixed pursuant to the Public Trustee Act. There is no evidence as to the present level of fees chargeable under that Act. But the defendant concedes that the amounts which could be charged, and which would be likely to be charged by the Public Trustee are those which would be charged by
Perpetual Trustees Queensland Limited were it to be appointed to administer the fund.
[21]s 59(1)
[22]s 59(4)
Perpetual’s fees and charges are proved by the evidence of Mr Gallagher from Perpetual. Anticipating that Mr Hills, as Christopher’s litigation guardian, will apply to have the award paid to Perpetual and not to the Public Trustee, the defendant argues that there is no power to appoint Perpetual, or anyone other than the Public Trustee, as a trustee. This is said to come from the proper interpretation of s 59. The defendant argues that if I were to direct the award to be paid to Perpetual I should not allow anything for funds management because s 59 does not give power “to appoint a trustee or even to create a trust” (other than by the appointment of the Public Trustee). If I upheld that argument I would not appoint Perpetual. So if I am persuaded to appoint Perpetual it will be upon the basis that it is a trustee and is entitled to charge commission and fees as a trustee company, the right to which is regulated by the Trustee Companies Act 1968 (Qld). There is no suggestion that the various commissions and fees according to Mr Gallagher’s evidence are inconsistent with that Act or any other law which might affect Perpetual’s right to charge commissions and fees when administering this trust fund for Christopher. Alternatively if I appoint the Public Trustee, then as already mentioned, the defendant concedes that Mr Gallagher’s evidence sufficiently establishes the likely administration fees which would be charged.
Accordingly a least until Christopher turns 18, there will be a need for a fund to be administered by a trustee with a consequent cost as indicated by Mr Gallagher’s evidence. As the defendant also concedes, that cost is a loss for which Christopher must be compensated.
I was also informed by the plaintiff’s counsel that Mr Hills would not seek to have any part of the award paid out to any person other than the nominated trustee, other than the agreed amount of out-of-pocket expenses and interest on them, i.e. $75,000. The defendant then agreed that I could assume that the funds under administration would become the amount of the award less $75,000.
So far as the allowance for funds management for the period of Christopher’s minority is concerned, there is then one remaining issue, which concerns the tax deductibility of some of the fees which would be charged by a trustee. Before going to that, it is necessary to summarise Mr Gallagher’s evidence about Perpetual’s fees.
There are three relevant fees. The first is an establishment fee charged by Perpetual at the rate of 0.65 per cent of the initial investment, capped at $35,000. The second is Perpetual’s so called ongoing management fee, charged at these rates:
0 to $500,000 1.925%
$500,000 1.375%
$1,000,000 0.825%
Funds greater than $2,000,000 0.65%
Thirdly, there are investment management fees charged by third parties to Perpetual. These include brokerage paid to stockbrokers. On various assumptions as to the mix of managed funds and direct investments and as to rates of third party fees and brokerage (none of which are challenged) Mr Gallagher says that the third party investment fees can be assumed to be 0.018 per cent of the (original) capital. In turn Mr Gallagher makes certain assumptions as to the rate at which the fund is used for the maintenance and welfare of Christopher. He assumes, in effect, that Christopher will draw upon the fund at an even rate. (Although his initial drawings are likely to be relatively lower during his childhood so that assumption favours the defendant.)
Returning to the question of tax deductibility, Mr Gallagher says, and the defendant agrees, that Perpetual’s ongoing management fee would be deductible but not the other fees. Mr Gallagher’s report calculates a tax deduction upon the fee at various levels of income and in turn provides a calculation of the net present value of Perpetual’s fees after allowance for that tax deduction. In that calculation
Mr Gallagher assesses the tax deduction by looking at the tax which would be paid on the earnings which he has assumed for this report, which are five per cent per annum of the capital sum. The total income tax on those assumed earnings can then be expressed as a percentage and it is that percentage which Mr Gallagher has applied to the Perpetual ongoing management fee to reach his total after tax cost of funds management.
There seems to be no argument on the plaintiff’s behalf that there should be no consideration of the tax deductibility of these fees. Mr Gallagher was called in the plaintiff’s case and his report details the tax effect upon the cost of this funds management. The particulars of the plaintiff’s claim in this respect were formulated by reference to an earlier report of Mr Gallagher which was not tendered. It seems from the amount there claimed, when compared with the current report, that the plaintiff was accepting that an allowance had to be made for the tax deductibility of these fees. No contrary argument was advanced in the oral or written submissions of the plaintiff. The issue instead is one of the extent of that allowance.
The defendant argues that an allowance should be made at the top marginal rate for personal income tax, rather than effectively at an average rate as Mr Gallagher has calculated. In my view the defendant’s argument should be accepted. The plaintiff’s need requires the expenditure of money, and the expense is a loss of which the defendant’s negligence was the cause: Willett v Futcher [2005] HCA 47 at [10]. The expense to the plaintiff should be measured by accounting for the tax deduction which this expenditure will provide. Mr Gallagher’s evidence, and in turn the plaintiff’s case in this respect, assumes that the fund will result in assessable income of the order of five per cent of the capital. So the deductibility of the relevant portion of Perpetual’s fees will affect the true expense according to the top marginal tax rate. Mr Gallagher’s report was apparently based upon the previous tax rates before those introduced in the last Budget, so that the difference between his figures and what would follow from the use of the top marginal rate is somewhat less.
Otherwise I will adopt Mr Gallagher’s evidence as to the likely fees by Perpetual or another trustee. The result is that upon the award of $5,140,782, which is the total of the other components of this judgment less $75,000 for out-of-pocket expenses, the present value of the relevant fees before allowance for tax deductibility is $419,124. That includes what Perpetual calls its ongoing management fee in the sum of $293,585[23]. Allowing for a tax deduction on that at the rate of 45 per cent, the sum of $132,113 should be deducted. The result is that I assess the present value cost of the necessary administration and management of Christopher’s award until he is aged 18 at $287,011.
[23]$287,785 (on $5,000,000 per table on page 7 of Mr Gallagher’s report) plus $140,782 X .0412 (marginal rate for this fee: same table)
The report of Mr Gallagher made similar calculations for the ongoing administration of the fund over the rest of Christopher’s life. Yet Christopher has no need for that service after he turns 18. He has no impaired intellectual capacity and he has no need to have others administer his financial affairs for him.
But it is argued for the plaintiff that there will be some additional expense which will result from Christopher’s physical disabilities.[24] The difficulty for the plaintiff’s case is that there is no evidence as to the financial consequence, if any, of the plaintiff’s physical disabilities upon the cost of the management of his money. Faced with this problem, those arguing the plaintiff’s case assert that there should be an allowance for a global sum “based on as fair and reasonable assessment as the court thinks possible”. Ultimately it is submitted for the plaintiff that an additional global award “of the order of $200,000 is reasonable for the period from age 18”.
[24]see Willett v Futcher [2005[ HCA 47 at [11]
There is no basis for that claim. Christopher will be able to make his own decisions about his money. He will be able to engage his own advisers and do his own research. He will be able to give instructions to those who assist him. In particular he will be able to use the internet and emails. He will be at some disadvantage in communicating with his advisers, at least by the telephone. But I am not persuaded that this will involve some extra expense. It is argued that Mr Gallagher gave an example of how that could occur when he said that Perpetual would not usually take email instructions from the plaintiff. It is said that “this problem would obviously lead to avenues of expense not definable at this time but nevertheless real”. I do not accept that argument. I accept that there would be inconvenience but not further expense at least in any amount which justifies a further allowance within this award.
Accordingly the claim for so called funds management from age 18 onwards will not be allowed. The total amount allowed under this head will be $287,011.
Conclusion
The plaintiff will have judgment for $5,502,793 which is calculated as follows:
General damages $220,000
Interest on past general damages $9,000
Future loss of earning capacity $519,226
Past gratuitous services and care $255,500
Interest on past gratuitous services $63,875
Future care $2,970,136
Home modifications $77,307
Hydrotherapy pool $40,000
Home maintenance $53,360
Housekeeping and cleaning $36,036
Therapeutic aids, appliances and equipment $215,276
Maintenance on aids, appliances and equipment $9,440
Technology issues $252,250
Future medical treatment $7,438
Future paramedical treatment $77,521
Future pharmaceutical costs $24,291
Additional education costs $108,717
Additional motor vehicle costs $60,000
Additional travel costs $44,180
Case manager $97,229
Out of pocket expenses $60,000
Interest on out of pocket expenses $15,000
Funds management $287,011Total $5,502,793
I will hear the parties as to further orders, including as to costs.
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