Hulanicki v Walton
[2015] ACTCA 14
•24 April 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL
Case Title: | Hulanicki v Walton |
Citation: | [2015] ACTCA 14 |
Hearing Date: | 25 February 2015 |
DecisionDate: | 24 April 2015 |
Before: | Murrell CJ, Refshauge and Penfold JJ |
Decision: | See [52]–[54] |
Category: | Principal Judgment |
Catchwords: | DAMAGES – Measure of damages - measure of damages in actions for tort – personal injuries – general principles |
Cases Cited: | Gray v Richards [2014] HCA 40 Hulanicki v Walton [2014] ACTSC 17 Richards v Gray [2013] NSWCA 402 |
Parties: | Jessica Irene Hulanicki BHNF Helen Hulanicki (Appellant) Clare Louise Walton (Respondent) |
Representation: | Counsel Mr A Bartley SC with Mr F Tuscano (Appellant) Mr P Deakin SC with Ms K James (Respondent) |
| Solicitors Ken Cush & Associates (Appellant) DLA Piper (Respondent) | |
File Number: | ACTCA 13 of 2014 |
Decisions under appeal: | Court: Supreme Court of the ACT Before: Burns J Date of Decision: 7 March 2014 Case Title: Hulanicki v Walton Citation: [2014] ACTSC 17 |
| Court: Supreme Court of the ACT Before: Burns J Date of Decision: 24 July 2014 Case Title: Hulanicki v Walton (No 2) Citation: [2014] ACTSC 174 |
THE COURT:
Background
On 6 March 2006, the appellant/plaintiff, who was then 20 years old, was involved in a motor vehicle accident in which she sustained a severe traumatic brain injury. The injury profoundly disabled the appellant and dramatically impacted upon her family.
The appellant commenced proceedings. The respondent admitted breach of duty of care. The matter proceeded before the primary judge as an assessment of damages. The appellant was 28 years old at the date of the assessment hearing.
The principal decision of the primary judge was delivered in March 2014: Hulanicki v Walton [2014] ACTSC 17. The primary judge gave judgment in the sum of $4,227,676.32 (the compensatory damages), which included monies already paid by the respondent’s insurer to third parties (the Health Insurance Commission and Centrelink) on behalf of the appellant. In addition, the primary judge awarded fund management damages, to be calculated by the parties in accordance with his Honour’s reasons. In those reasons, his Honour refused damages for “fund management on fund management” in accordance with the NSW Court of Appeal decision in Richards v Gray [2013] NSWCA 402.
In relation to her ongoing need for care, the appellant gave evidence that she had difficulty with concentration, retaining information, following written instructions and multitasking. She was prone to bouts of frustration and anger. She tended to become stressed and disorientated, and she fatigued easily. When she returned to her employment with a real estate agency about one year after the accident, she was unable to cope and she resigned after six months. She attempted other employment, without success. At home, she had difficulty with cooking, washing and cleaning. She was unable to manage money and her mother managed her Centrelink allowance. Her driver’s licence had become conditional on her wearing special glasses.
Since the accident, the appellant’s parents had provided the appellant with almost constant supervision and care. However, the primary judge found that, after an initial period (when she did require more intensive domestic care and assistance), the appellant required care and assistance for only three hours a day. He awarded damages for future care at the rate of three hours a day for the remainder of the appellant’s life expectancy of 60 years.
On 24 July 2014 the primary judge amended the judgment pursuant to the slip rule to deduct the amount paid by the respondent’s insurer to third parties and thereby reduce the compensatory damages to $3,946,775.98. His Honour awarded fund management damages of $1,307,172: Hulanicki v Walton(No 2) [2014] ACTSC 174.
Grounds of Appeal
The appellant appealed against the assessment of damages for past and future domestic care and funds management. The appellant also asserted that the payment of monies to the Health Insurance Commission and Centrelink should not have resulted in a reduction in the judgment sum.
The grounds of appeal can be summarised as follows:
(a)The assessment of past domestic care needs at three hours per day was contrary to the evidence about the continuous domestic care that had been provided by the appellant’s family and against the weight of the expert evidence.
(b)The assessment of future domestic care was erroneous:
(i)The primary judge failed to award a buffer for additional future care consistent with his Honour’s finding that the appellant should receive a buffer because of the increased risk of early onset dementia.
(ii)The primary judge assessed the appellant’s future domestic care needs to be three hours per day, contrary to the evidence about the continuous domestic care that had been provided and the evidence about the appellant’s future care needs.
(iii)The primary judge deducted 15% from the damages awarded for future care to allow for vicissitudes.
(c)The primary judge failed to give proper reasons for allowing only three hours per day for past and future domestic care.
(d)The primary judge should have awarded a sum for “funds management on funds management”.
(e)The primary judge erred in amending the judgment sum from $4,227,676.52 to $3,946,775.98.
The appellant abandoned an application for leave to adduce further evidence in relation to the correct method of calculating fund management costs.
The appellant sought orders that:
(a)The appeal be allowed with costs.
(b)The assessment of past and future care made by the primary judge be set aside and be reassessed by the Court. Alternatively, the matter be remitted to the Court below for retrial on that issue.
(c)The award for fund management be set aside and damages for fund management be reassessed by the Court to include “funds management on funds management”.
(d)The record be corrected so that the judgment sum includes the sums paid to the Health Insurance Commission and Centrelink.
Past and Future Domestic Care and Assistance
In relation to the assessment of the need for past and future domestic care and assistance, the appellant made four points.
First, the appellant contended that the primary judge erred in finding that she needed only three hours per day of care for both past and future domestic care. The appellant submitted that, when assessing her supervision needs, the primary judge failed to factor in the history of constant supervision; as she had been protected by her family’s constant supervision, the dangers associated with her executive dysfunction had rarely been realised, but they did exist.
Second, the appellant criticised the primary judge for approaching her claim for past and future care on the basis that it was primarily a contest between Dr Zeman and Ms Miller-Ravagnani. The appellant submitted that, in so doing, the primary judge had failed to consider and analyse the opinions of Dr Jungfer, Professor Shores, Dr Waterson and Dr Langeluddecke in the context of the lay evidence.
Third, the appellant criticised the primary judge for failing to take into account Dr Zeman’s recommendation that the appellant should be assessed by a neuropsychologist.
Finally, the appellant submitted that the primary judge failed to furnish proper reasons for finding that she needed only three hours of care per day.
The third argument can be dismissed quickly. Dr Zeman’s recommendation that the appellant should be assessed by a neuropsychologist did not relate to the appellant’s need for past and future care. Rather, it related to the appellant’s ability to manage funds. In any event, the appellant was examined by neuropsychologists, including Dr Langeluddecke, a highly qualified neuropsychologist. When Dr Zeman recommended that the appellant be seen by neuropsychologist, he did not realise that she had already been seen by Dr Langeluddecke.
In relation to the appellant’s second submission, we need to make brief reference to the evidence of the relevant health care professionals.
The appellant’s case in relation to care relied heavily on the opinions of Ms Miller-Ravagnani, an occupational therapist. The appellant had engaged Dr Buckley, a rehabilitation specialist, but did not tender his reports (although the reports were provided to Ms Miller-Ravagnani). In her first report, Ms Miller-Ravagnani said that the appellant needed four hours of “drop-in supervision and vigilant care” seven days per week (to provide prompting and assist with shopping, meal preparation, house work, domestic administration and other needs) and would benefit from a “leisure buddy” for eight hours per week. In a later report, Ms Miller-Ravagnani expressed concern about whether the appellant should be left unattended overnight, and she recommended an additional 12 hours of “inactive supervision and vigilant care” seven nights a week.
The appellant qualified Dr Jungfer, a consultant psychiatrist who was experienced in treating clients who had suffered traumatic brain injury. Initially, Dr Jungfer observed that the appellant could be safely left alone, but would require attendant care to assist her, particularly at the beginning and end of the day and in relation to organising domestic chores. In a later report, Dr Jungfer noted the recommendations of the occupational therapist and expressed the view that they were extremely conservative. Dr Jungfer supported overnight supervision to “reduce the element of risk”. However, when she was cross-examined she conceded that there was no history of the appellant wandering at night or otherwise endangering herself.
Associate Professor Shores, a neuropsychologist, undertook a cognitive assessment of the appellant and reported on the degree of her impairment, but did not address the appellant’s care needs.
Dr Waterson, a consultant neurologist, opined that the appellant required supervision for some tasks and it seemed unlikely that she would be able to live independently without some form of supervision. However, his opinion went no further.
The respondent’s case in relation to care relied on the evidence of Dr Zeman, a rehabilitation specialist. He expressed the opinion that the appellant did not require personal, attendant or nursing care as a result of the accident. He also stated that the appellant required seven hours of assistance per week (five hours “prompting and domestic support” and two hours shopping assistance). If the appellant was to live alone an additional one hour per month was recommended for “case management to supervise services and provide occasional input”.
Dr Langeluddecke, the neuropsychologist who was qualified by the respondent, reported that:
1.13 Need for Domestic Assistance: I am of the opinion that... [the appellant] is likely to have required considerable domestic assistance since her brain injury, and will continue to do so in the future, given wide-ranging cognitive, behavioural, and physical sequelae to her TBI. A home-based occupational therapy assessment is necessary to elucidate the nature and extent of domestic assistance required.
Dr Langeluddecke was not required for cross-examination.
With the exception of the evidence of Associate Professor Shores and Dr Waterson, the primary judge referred at some length to the evidence of each of the above healthcare professionals, and their opinions about the appellant’s need for domestic assistance. Given the very limited assistance that Associate Professor Shores and Dr Waterson had provided on the question of the appellant’s past and future care needs, it is not surprising that the primary judge did not refer to their evidence in that context.
At [97] – [103], the primary judge referred to the evidence of Dr Jungfer. At [102], the primary judge noted that Dr Jungfer supported overnight care for the appellant but observed that there was no history of wandering at night, and no evidence of night time misadventure.
At the hearing of the appeal, the appellant made a significant concession that it was open to the primary judge to find (as he did) that she did not require overnight care.
At [138] – [142], the primary judge made the following findings:
[138] The evidence establishes that the plaintiff was also seen by a rehabilitation specialist, Dr Stephen Buckley. He apparently provided the plaintiff’s lawyers with a number of reports. None of his reports were tendered by the plaintiff. Some, but not all, of those reports were provided to Ms Miller-Ravagnani and formed part of the basis for her opinions. This has obvious ramifications for the recommendations of Ms Miller-Ravagnani.
[139] The defendant submitted, based on the evidence of Dr Zeman, that seven hours per week assistance (five hours for prompting and domestic support, two hours for shopping assistance) was adequate, but that the maximum should be two hours a day on average.
[140] I am satisfied that the opinions of Dr Zeman are to be generally preferred to those of Ms Miller-Ravagnani. First, he is better qualified by education and experience to assess the plaintiff’s needs. Secondly, I am satisfied that Ms Miller-Ravagnani approached her task by determining what the plaintiff may need, or what may be of use to her... It appears to me that Ms Miller-Ravagnani has covered all the possible future needs of the plaintiff, including those unlikely to arise.
[141] I have allowed past domestic services in the period leading up to the hearing at three hours a day. I accept that with appropriate training the plaintiff will be capable of performing more of the functions that others presently perform for her, but counterbalancing that is the proposition that greater independence will require more supervision (as opposed to performance of duties for her). Sometimes she may require more assistance or supervision than at others. On balance I consider that the plaintiff’s overall needs will not lessen if she moves into her own home, so that I would allow three hours a day for the rest of her life.
[142] I do not accept that the plaintiff requires overnight care. The plaintiff has demonstrated no behaviour over the more than seven years to hearing which would indicate the need for such care. For example, there is no suggestion that she wanders at night, or attempts to leave the house. The prospect of the plaintiff being at risk in the event of a fire or other emergency is speculation, and based on the occurrence of a remote event.
As the appellant submitted, the primary judge did approach the appellant’s claim for past and future care on the basis that it was primarily a contest between the evidence of Dr Zeman and Ms Miller-Ravagnani. But, putting aside the claim for overnight supervision (which was not pressed on the appeal), the appellant’s claim for past and future care was primarily a contest between those two witnesses. Dr Jungfer essentially adopted the approach of Ms Miller-Ravagnani, Associate Professor Shores had nothing to say about care, and the reports of Drs Waterson and Langeluddecke added almost nothing to the evidence of Dr Zeman and Ms Miller-Ravagnani.
Contrary to the submission of the appellant, the lay evidence about constant supervision (and the corollary that supervision would have averted most risks of danger) was not overlooked by the primary judge. His Honour referred to that evidence, and the reporters expressed their opinions in the context that the appellant’s family had provided constant supervision.
As to the appellant’s final submission (that the primary judge failed to give adequate reasons for allowing three hours a day of domestic assistance), we make the following observations. The assessment of the need for care and assistance is often difficult. It involves both a consideration of the evidence and the application of common sense. In his reasons, the primary judge referred to the relevant evidence. Although his Honour “generally preferred” the evidence of Dr Zeman to that of Ms Miller-Ravagnani, he did not unquestioningly accept the views of Dr Zeman. Dr Zeman had recommended the equivalent of one hour of domestic assistance per day but the primary judge awarded three hours per day. The obvious inference is that his Honour found the opinions of both Dr Zeman and Ms Miller-Ravagnani to be unduly favourable to the party who had engaged them. In submissions, the respondent accepted that two hours could be allowed. On the other hand, putting aside any requirement for overnight supervision, Ms Miller-Ravagnani recommended domestic assistance for a minimum of four hours per day. The primary judge’s conclusion that the appellant needed three hours per day of assistance was reasonably consistent with the approaches of both parties. Given the state of the evidence, after his Honour’s reasoned rejection of the claim for overnight supervision, the appellant’s contention that his Honour should have further articulated his analysis of the evidence was a counsel of perfection.
We find no error in the primary judge’s approach to the assessment of the appellant’s past and future needs for domestic assistance.
Buffer for Increased Care in the Future
The appellant submitted that the primary judge failed to give effect to his observation that a “modest buffer” for additional future care was necessary. The primary judge had indicated that a “modest buffer” would be appropriate so as to account for the possibility that the appellant would develop early dementia and therefore require additional intensive care in the future. The appellant submitted that a buffer of up to $200,000 would be appropriate.
At [134], the primary judge said:
As I have already noted, the evidence establishes that an acute traumatic brain injury such as that suffered by the plaintiff increases the risk of an earlier onset of dementia. I am satisfied that the injury suffered by the plaintiff will lead to the onset of dementia in the plaintiff if she lives long enough for that to occur. I am not satisfied that any probable date for the onset of that dementia, or the need for care arising from it, can be estimated. In any event, I am satisfied that were she to develop dementia within her current life expectancy, it would significantly reduce her life expectancy. In my opinion, the appropriate way to balance these possibilities is to assess damages for future care on the basis that she will not suffer dementia, and to provide a modest buffer against the need for additional future care.
The reasoning in this paragraph is somewhat opaque, but we are satisfied that it was the primary judge’s intention to provide a modest buffer. The respondent submitted that a buffer of $100,000 would adequately reflect the primary judge’s intention.
In our view, the primary judge meant to say that, while the risk of early dementia created an associated possibility that greater care would be required in the future, that possibility had to be weighed against the reduction in life expectancy associated with dementia. But (in his Honour’s opinion) the competing considerations did not financially neutralise each other, as Dr Zeman suggested. Rather, the financial debit associated with a higher level of care and early dementia outweighed the financial credit associated with the accompanying shorter life expectancy. Consequently, there should be a “modest buffer” to meet any additional care caused by possible early dementia.
Neither party submitted that such an approach was erroneous. We consider that the approach was open to the primary judge.
Unfortunately, when it came to calculating damages, the primary judge overlooked the provision of the buffer.
Effect should be given to the primary judge’s intention and a modest buffer, which we would set at $150,000, should be allowed. Clearly, this is not an amount that can be calculated with any precision, but we have arrived at this figure having regard to such of the relevant circumstances as are known to us, including in particular the evidence before the primary judge:
(a)That the appellant’s life expectancy in the absence of dementia was 60 years (that is, that she could live to the age of 88) (referred to at [118] by the primary judge).
(b)That if she developed dementia, she was likely to do so in her sixties (referred to at [88] and [92] by the primary judge).
(c)That if she developed dementia, she would at that stage have a life expectancy of around five years (at [90] and [115] by the primary judge).
(d)That the primary judge used $45 per hour as the basis for calculating future care needs (noted at [143] by his Honour).
Reduction of Future Care Damages for Vicissitudes
The parties agreed that the primary judge erred in reducing damages for future care by 15% for vicissitudes: at [143]. The damages for future care were assessed by reference to the appellant’s life expectancy of 60 years, calculated in accordance with the Australian Bureau of Statistics Life Tables. An allowance for vicissitudes is built into the Life Tables. Thus his Honour’s reduction of 15% effected a double count for vicissitudes. Damages for future care should be adjusted accordingly.
Gray v Richards: Funds Management Expenses
The High Court decision in Gray v Richards [2014] HCA 40 was delivered after the primary judge gave judgment applying the NSW Court of Appeal decision in the same matter (Richards v Gray) and declining to allow “fund management on fund management”.
In Gray v Richards, the High Court overturned the decision of the NSW Court of Appeal and allowed “fund management on fund management”. The High Court reasoned that fund management expenses may be one component of the loss consequent upon injury to a plaintiff at [47]:
...if the fund management expense component of an award reflected actual market conditions and was not contrary to any statutory control, then it was compensable as an expense consequent upon the tortfeasor’s wrong.
The parties agreed that the damages should include “fund management on fund management”, in accordance with the High Court’s decision in Gray v Richards. In this case, the fund management expenses should be assessed on the basis that the fund to be managed extended beyond the net fund of compensatory damages (here, assessed by the primary judge at about $3.9 M) to include the damages awarded for fund management (here, assessed by the primary judge at about $1.3 M, making a total of about $5.2 M).
The primary judge found that it was reasonable for the fund to be managed by the Public Trustee for the ACT. That finding was not challenged on appeal. The experts accepted that, in accordance with market conditions, the Public Trustee would charge fees on fund management. There was evidence that, if “fund management on fund management” was not allowed, the fund would be exhausted eight to 13 years earlier than was intended.
It is convenient that this Court should reassess the damages for fund management consistent with the decision in Gray v Richards, rather than remitting the matter for redetermination.
As to the cost of fund management, Mr Plover (the appellant’s expert) and Ms Bossert (the respondent’s expert) differed. Mr Plover calculated fund management expenses to be 59.7% of the initial fund, but Ms Bossert calculated the expenses to be only 50.5% of the initial fund. At the hearing of the appeal, neither counsel was able to explain the reasons for the difference, but they sensibly agreed that this Court should take a midpoint and calculate fund management expenses at the rate of 55.1% of the initial fund. The parties will be directed to produce short minutes of order in which fund management expenses are calculated on that basis.
Amendment of Judgment Sum
The final judgment sum did not include the amount of $280,900.34 (which related to out-of-pocket expenses and loss of earnings) that had already been paid on behalf of the appellant (by the respondent’s insurer) to third parties, the Health Insurance Commission and Centrelink, to reimburse them for monies paid to the appellant.
The parties agreed that any damages awarded for out-of-pocket expenses and loss of earnings should form part of the damages award. The fact that the appellant was obliged to repay sums to third parties (and, in this case, that the respondent’s insurer had repaid sums to third parties on behalf of the appellant) should not reduce the amount of the judgment recorded, which should accurately reflect the actual amount of compensation assessed by the Court as that to which the appellant was entitled.
The record should be corrected to show judgment for the full amount (including sums paid or required to be paid to third parties).
As noted above, the amount of $280,900.34 (which will be reflected in the judgment sum when the record is corrected) has already been paid on behalf of the appellant by the respondent’s insurer to third parties. It should not form part of the initial fund upon which fund management expenses are calculated.
It is also noted that the sums of $3,946,775.98 and $1,307,172.00 have been paid to the appellant from the judgment sum that will be awarded by this Court.
Orders
The parties are directed to produce short minutes of order within seven days that reflect:
(a)The re-calculation of the initial fund to include the buffer determined at [39] above and to reverse the mistaken reduction of the calculated amount by 15% for vicissitudes (at [40] above).
(b)The calculation of damages for the cost of fund management (including “fund management on fund management”) at 55.1% of the initial fund after re-calculation under para (a) above but reduced by the amount of $280,900.34 which has already been paid by the respondent’s insurer to third parties.
The parties are directed to file short written submissions concerning costs in accordance with the following timetable:
(a)The appellant by 1 May 2015.
(b)The respondent by 15 May 2015.
(c)The appellant in reply by 29 May 2015.
The parties have liberty to apply to list the matter for oral submissions on costs.
| I certify that the preceding fifty-four [54] numbered paragraphs are a true copy of the Reasons for Judgment of the Court of Appeal. Associate: Date: 24 April 2015 |
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