Kars v Kars

[1996] HCATrans 76

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B29 of 1995

B e t w e e n -

MARK JOSEPH KARS

Applicant

and

REBECCA DAWN KARS

Respondent

Application for special leave to appeal

TOOHEY J
McHUGH J
KIRBY J

TRANSCRIPT OF PROCEEDINGS

FROM BRISBANE BY VIDEO LINK TO CANBERRA

ON FRIDAY, 15 MARCH 1996, AT 10.43 AM

Copyright in the High Court of Australia

MR J.A. GRIFFIN, QC:   If the Court pleases, I appear with MR R.M. STENSON for the applicant.  (instructed by Neil O’Sullivan & Rowell)

MR M. GRANT-TAYLOR:   If the Court pleases, I appear for the respondent.  (instructed by Peter Daley)

MR GRIFFIN:   The issue is whether damages for personal injuries can properly include compensation in respect of care to the extent to which it will be provided in the future by the defendant tortfeasor.  It is submitted that if it is thought that the point is one which merits the grant of special leave, this is a very suitable vehicle for that purpose because there was a positive finding in this case by the primary judge that some of the future care that the plaintiff will need will be provided by the plaintiff’s husband who was the tortfeasor.  In some of these cases such as in the case of Motor Accidents Insurance Board v Pulford to which we have made reference, no such finding could be made.  In that case the defendant was not married to the plaintiff and had provided care up to the hearing of the case out of a sense of moral obligation, and there was a real doubt as to whether that care would continue after the plaintiff had obtained a substantial award of damages.

The issue plainly requires the attention of this Court because, if, as is suggested, the point is concluded by what are no doubt general remarks made in the decision in this Court in Van Gervan v Fenton, there is now a decision of the House of Lords in direct conflict with the decision of this Court.  The approach of our learned friends is to say, yes, the case does raise an issue of general importance and, yes, there is a conflict of authority, but the decision of the House of Lords in Hunt v Severs is plainly wrong and the majority of the Court of Appeal in this case was plainly right.

Now, that approach ignores two important features, in our submission.  Firstly, Van Gervan v Fenton was not concerned with a case of care supplied by a defendant tortfeasor.  Where in that case and the other High Court decisions such as Griffiths v Kerkemeyer it was said that it does not matter who supplies the care, the Court was concerned with demonstrating that it did not matter whether the care was provided by a commercial carer, on the one hand, or, on the other hand, a relative or a friend.  In Van Gervan v Fenton, the more recent case, the Court was concerned to establish that the commercial cost of the care was the appropriate measure of damages in each instance irrespective of the voluntariness of the care and irrespective of the actual loss suffered by the care giver.

The same can be said of the statement of Lord Justice Megaw in Donnelly v Joyce.  That is, it was a general statement.  That was a statement to the effect that compensation for care is based on need and it is immaterial who supplies the care.  That statement, again, is particularly directed at underpinning the proposition that damages are recoverable for care even if the care is supplied gratuitously.  So, none of the cases, none of the High Court cases or Donnelly v Joyce, either by way of ratio or obiter, deal with the case of care provided by the defendant tortfeasor.

The other matter ignored by our friend’s approach is that, unlike the House of Lords, this Court has not examined the tension between the proposition that a plaintiff recovers in respect of the need of care on the one hand and the proposition that a defendant pays twice if he both pays for and provides the care, nor has the Court examined the extent to which a court should be free to disregard the fact that the plaintiff’s suit is against the defendant tortfeasor, but the reality is that the defendant is an insurer.

Your Honours, there has been a good deal of criticism of the proposition that one can in these cases readily disregard the fact that the defendant is an individual and proceed on the basis that the real defendant is an insurer.  For example, many of the judicial statements have drawn attention to the fact that one would then have to look and perhaps differentiate between different kinds of insurance, between, for example, compulsory insurance and voluntary insurance.  Additionally it has been pointed out in these cases that whereas insurance stands behind a defendant in all of the cases, ordinary legal principles are applied in the determination of the cases and in the calculation of the appropriate damages.

Now, if those principles are to be departed from, it is submitted that the departure should be an express departure and once it is recognised of course that a departure is appropriate it would be necessary to establish the extent to which ordinary legal principles should be departed from.  It is our submission that the Full Court of the Supreme Court of Tasmania in the Pulford Case and Professor Fleming in his note in the Australian Law Journal convincingly demonstrate that as a matter of policy a judgment should not include any component for care performed or to be performed by a defendant tortfeasor and that that should be so whether or not there is an insurer, even a compulsory insurer involved.

KIRBY J:   I have not read Professor Fleming’s article.  What was his reason of policy, without going to it, just tell me?

MR GRIFFIN:   His reason of policy fundamentally is that there is double payment.

KIRBY J:   But that does not seem a very convincing - if the defendant is the husband and he has paid perhaps the insurance premium - I mean, I know we are now lifting the veil of insurance, but it seems a bit odd because he is going to be supplying it that he gets nothing for it except that he is the defendant.

MR GRIFFIN:   What Professor Fleming said, your Honour, was this:

surely the only justification of Griffiths principle, in face of the well‑grounded objection against double recovery - all the more in these days of legislative efforts to reduce the cost of insurance - is that it enables the plaintiff to recompense the donor of the services.  The donor, typically a close relative, is less able to bear the cost than the well‑heeled defendant (in reality almost always his or its insurer).  Griffiths is thus a surrogate for any direct claim which the law denies the donor against the defendant.  But where donor and defendant are one and the same, and where it would be against sound policy to enable a defendant to be repaid for her gratuitous help by, in effect, her own liability insurer, this rational disappears.

KIRBY J:   It is really just a statement of sound policy without an explanation of why the husband should not - although we have a judicial finding that he will supply the service, that is a need of the plaintiff that he gets nothing whereas if it is a neighbour he gets the Griffiths v Kerkeymeyer damages.

MR GRIFFIN:   Yes.

TOOHEY J:   Could I just ask you this, Mr Griffin.  What would be the consequence of a grant of special leave in the allowing of the appeal?  The matter would simply rest as it rested with the trial judge, would it, on the footing that a discount had been made for the gratuitous services provided by the present applicant?

MR GRIFFIN:   Yes, that would be right, your Honour.

TOOHEY J:   The point of my question is would the matter be determined once and for all by this Court if special leave were granted and an appeal allowed or would the matter have to go back for any other purpose or any purpose associated with this point?

MR GRIFFIN:   No, the matter would not need to go back.

TOOHEY J:   I am sorry?

MR GRIFFIN:   No, not at all because the primary judge assessed what he would otherwise have awarded in this respect, $61,500, but declined to award it because he considered that the balance of authority was against awarding damages of this kind.

KIRBY J:   So it is quantified then?

MR GRIFFIN:   Yes.

KIRBY J:   I say it is quantified.  That is what Justice Toohey’s question is.  If it is quantified it does not have to go back.

MR GRIFFIN:   No, it is fully quantified and what the Court of Appeal did was to simply increase the award of damages by that sum of $61,500.

TOOHEY J:   You would be seeking simply to restore the judgment of the primary judge.

MR GRIFFIN:   That is so, yes.

TOOHEY J:   Yes, thank you.

MR GRIFFIN:   Your Honours, in Hunt v Severs the House of Lords unanimously held in a decision handed down in April 1994 that a plaintiff was precluded from recovering sums representing the value of services supplied or to be supplied by the defendant tortfeasor.  Lord Bridge said that:

By concentrating on the plaintiff’s need and the plaintiff’s loss as the basis of the award in respect of voluntary care received by the plaintiff, the reasoning in Donnelly v Joyce diverts attention from the award’s central objective of compensating the voluntary carer.

On this basis the House of Lords held that the statement of Lord Justice Megaw in Donnelly should be subject to the qualification that it does not apply to care provided by the defendant tortfeasor.

McHUGH J:   But the assumption is that the defendant tortfeasor will continue to provide it in the future and in the case of husbands and wives there is at least a one in three probability that it will not be because they will be divorced.

MR GRIFFIN:   Your Honour, in this case the primary judge catered for that.  He calculated that the amount of care of the kind that was already being provided by the husband, the amount of that care that would be provided in the future should be valued at $123,000 but, to cater for the possibility or the possibilities that the defendant and the plaintiff might break up or be divorced or that, for other reasons, the defendant might not be able to provide the care, he discounted that figure to $61,500.          So, $61,500 amounts to an award in respect of care which the primary judge was able to hold on the balance of probabilities would be provided by the defendant tortfeasor.

McHUGH J:   Well, I appreciate that, but it is a statistical probability.  If the other party walks out the next day, that is the end of the matter and surely the whole basis of this jurisdiction is that the person should be compensated for the services that they are providing, although the money goes to the plaintiff, it cannot go to anybody else.  The object of the policy behind the doctrine is that the person who provides the services will be compensated for them.

MR GRIFFIN:   That is so, but then one comes into the countervailing proposition:  Should the defendant be compensated in respect of those services when he provides the services?  That is the nub of the problem.  Now, the House of Lords dealt expressly with the whole of the problem including the argument that because there is insurance behind the defendant tortfeasor, the ordinary principle should not apply and held that there was no sufficient substance in the argument that because the insurance company was in reality behind the defendant the principle should be inapplicable.  This is an express examination of this issue by the House of Lords and if our friends are correct, and if Mr Justice McPherson is correct, then there is now a decision of this Court in direct conflict with a decision of the House of Lords.

KIRBY J:   That is less significant than once it would have been.  The House of Lords - if we trawled around, we would probably find some other common law court that takes a different view.  I think we have got to look at it from the point of view of Australian law and it is relevant to point out that the House of Lords has looked at the question, but the fact that there is a conflict is not determinative.  I assume this is important for your client from the point of view of the general administration of this area of the law.  It seems a little unfair to the plaintiff to bring the plaintiff up here to carry the burden of the costs of a litigation of determination at this point.  Is it so

important to your client that your client would be prepared to carry the burden of costs, whatever the outcome of the appeal?

MR GRIFFIN:   I am sure that my client would regard that as appropriate.

KIRBY J:   I am ignoring, of course, the fact that your client is an insurance company.

MR GRIFFIN:   Yes.

TOOHEY J:   What do you mean by saying that you are sure that your client would regard it as appropriate?  It seems a somewhat cryptic answer, Mr Griffin.

MR GRIFFIN:   Yes, I was listening to some murmurings from the Bar table and we do not have specific instructions but we have no doubt that those instructions would be available.  Your Honours, could I conclude by saying that it is not simply a matter of a conflict between this Court and the House of Lords.  There are now the very substantial conflicts between State courts on this issue.  In Lynch v Lynch, the Court of Appeal in New South Wales held that damages are not to be reduced on account of the fact that care is supplied by the defendant tortfeasor, either in the past or the future.  Lynch v Lynch is a New South Wales decision to the effect that it is immaterial.

That approach has recently been adopted in Rosecrance v Rosecrance, a decision in the Northern Territory.  On the other hand there are decisions of the Full Court of the Supreme Court of Tasmania, the Full Court of the Supreme Court of Western Australia and decisions of single judges in Queensland which are to the contrary.  So, there is a very significant disparity in Australian authority on the point.  Those are our submissions, if the Court pleases.

TOOHEY J:   Yes, thank you, Mr Griffin.  Mr Griffin, before you resume your seat, while we are hearing counsel for the respondent, will you be in a position to tell us more expressly what the situation is regarding costs if the Court were minded to grant special leave?

MR GRIFFIN:   I will endeavour to do that, your Honour.

TOOHEY J:   Very well, thank you.  Mr Grant-Taylor.

MR GRANT-TAYLOR:   May it please your Honours, the respondent’s submission adopts the conclusions of Mr Justice McPherson at pages 35 and 36 of the application book and the respondent simply says that the decision of this Court in Van Gervan v Fenton is determinative of the issue that fell for the determination of the Court of Appeal.  The respondent accepts ‑ ‑ ‑

McHUGH J:   Well, if the matter is so simple, why was it necessary to have 16 authorities in your list of authorities, four on the A list and 12 on the B list?  You would be citing one every minute and a quarter on that basis.  It is very unsatisfactory, Mr Grant-Taylor, that the Court should be asked to have all those authorities available on special leave applications.

MR GRANT-TAYLOR:   If your Honour please, in light of what has been said by my learned friend, Mr Griffin, it will not be necessary to refer to any of those.

TOOHEY J:   Well time would preclude counsel from referring, in any application for special leave to appeal, to more than perhaps one or two and in some special circumstances maybe more, but Justice McHugh’s point is not just the reference to counsel, but the need to assemble authorities when it is apparent that they are not going to be referred to.

MR GRANT-TAYLOR:   May it please your Honour, I apologise for that.  I would only in my defence say that my opponents were similarly armed in their list.

McHUGH J:   The applicant in one of the later cases is the same.

TOOHEY J:   It is the fact that this is more widespread than the present application that I think has prompted remarks from the Bench, Mr Grant‑Taylor, but let us deal with the applicant’s case.

MR GRANT-TAYLOR:   I abide your Honour’s criticism.  Your Honours, the respondent accepts that the point is an important one.  The respondent also accepts that there is conflict among the States at an appellate level.  However, the primary submission why this matter is an inappropriate vehicle by which to test these questions in this Court is that anything that this Court has to say about the compensibility of past care will necessarily be obiter because past care was simply not in issue, either at first instance or before the Court of Appeal.  If that is so, the more appropriate course, in my submission, would be to postpone consideration of these questions until a matter comes before this Court in which the compensibility of both past and future care is squarely an issue, so that a comprehensive ratio ‑ ‑ ‑

KIRBY J:   But would not the principle be the same for past and future and does not therefore the determination of future care where the care giver is the defendant by logic apply to past care?

MR GRANT-TAYLOR:   Your Honour, that of course is the quandary which Mr Justice Davies addressed in the Court of Appeal.  He reached a view that the treatment of past care ought to differ from that of future care.  My point is simply that, whereas one may well be in a position to tack on to past care the principles which would determine the compensibility or otherwise of future care, it would not be a matter in which a ratio could be extracted from the decision.  Your Honours, unless there was some more particular point that you would have me address, those are my submissions.

TOOHEY J:   Thank you, Mr Grant-Taylor.  Mr Griffin.

MR GRIFFIN:   In reply to that point, your Honours, the grant of special leave, and in the consideration of this matter by this Court, would inevitably cover both the issue of past care and future care.  As I said before, the case is a very suitable vehicle for special leave in relation to future care because of that finding by the primary judge and the quantification of the relevant damages.  Your Honours, I regret to say that I have not received any communication to date but, if your Honours imposed that condition on the basis of special leave being granted, I would have nothing to say against it.

TOOHEY J:   Thank you, Mr Griffin. 

There will be a grant of special leave to appeal, conditional upon the present applicant, the proposed appellant, meeting the costs of the respondent’s costs of the appeal in any event, those costs not to be set off against any other costs which may have been awarded in the courts below.

AT 11.05 PM THE MATTER WAS CONCLUDED