Kars v Kars

[1995] QCA 410

IN THE COURT OF APPEAL	[1995] QCA 410
SUPREME COURT OF QUEENSLAND

Appeal No. 196 of 1994 Appeal No. 197 of 1994

Brisbane
[Kars. v. Kars]

BETWEEN:

MARK JOSEPH KARS

Appellant

AND:

REBECCA DAWN KARS

Respondent

Davies J.A.
McPherson J.A.

Shepherdson J.

Judgment delivered 08/09/1995
Separate reasons for judgment by each member of the Court; Shepherdson J. dissenting in part.

PLAINTIFF'S APPEAL IS ALLOWED: THE JUDGMENT BELOW IS SET ASIDE AND IN LIEU THEREOF, JUDGMENT FOR THE PLAINTIFF IN THE SUM OF $679,850.00 IS ORDERED. THE DEFENDANT'S APPEAL IS DISMISSED. THE DEFENDANT MUST PAY THE PLAINTIFF'S COSTS OF THE DEFENDANT'S APPEAL AND OF THE PLAINTIFF'S APPEAL.

CATCHWORDS:	PERSONAL INJURIES - QUANTUM: whether future gratuitous care provided by defendant to plaintiff is included in damages award; whether administration charge is included in quantum for future gratuitous services. Motor Vehicles Insurance Act 1936.
Counsel:	Mr. J. Griffin Q.C., with him Mr. A. Stenson for the appellant Mr. S. Williams Q.C., with him Mr. Grant-Taylor for the respondent
Solicitors:	Neil O'Sullivan & Rowell for the appellant Petra Daley, Solicitor, for the respondent
Hearing Date:	22 May 1995

IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND

Appeal No. 196 of 1994 Appeal No. 197 of 1994

Brisbane

Before Davies J.A.
McPherson J.A.
Shepherdson J.

[Kars. v. Kars]

BETWEEN:

MARK JOSEPH KARS

Appellant

AND:

REBECCA DAWN KARS

Respondent

REASONS FOR JUDGMENT - DAVIES J.A.

Judgment delivered the 8th day of September 1995

These are appeals by the plaintiff and the defendant against a judgment of the Supreme Court for damages for personal injuries. The appeals are, in effect, against the award of damages certified by a District Court Judge on 16 September last in the action which was remitted to the District Court for the purpose of assessment of damages. It is convenient to refer to the parties to this appeal, who are married, as the plaintiff and the defendant.

The parties were married on 31 May 1991. The plaintiff wife was injured through the negligent driving of a motor vehicle by her defendant husband on 2 September 1991. She was then 22, was 25 at the time of trial and is now 26. Her main injury was to her back. It has left her with a 35% permanent disability of her back and inability to perform full time, and indeed most part time work.

The defendant's appeal is against the amount awarded for future economic loss, that awarded for lost superannuation benefits and that awarded for future gratuitous care. The plaintiff's appeal is against the refusal of the learned trial Judge to award damages in respect of future gratuitous care provided by the defendant and against the exclusion of an administration charge in the amount assessed for damages for future gratuitous.

The total amount awarded for damages was $618,350.00. This was made up as follows:

Pain and suffering and loss of amenities	$ 75,000
Interest on that sum	1,500
Agreed past economic loss	29,000
Interest on that sum	5,200
Future economic loss	300,000
Loss of superannuation benefits	22,500
Special damages	31,000
Interest on that sum	1,080
Agreed past Griffiths v. Kerkemeyer damages	1,500
Interest on that sum	90
Future gratuitous services not provided by the defendant	84,000
Future gratuitous services of the type now provided by the defendant	61,500
Agreed future hydro therapy costs	2,150
Future medication expenses	3,330

It is convenient to deal first with the defendant's appeal.

The defendant's appeal

(a)         Future economic loss

The sum of $300,000.00 was the present value of $399.50, her net salary as a secretary at the time of her injury, over a period of 25 years at 5%. The plaintiff had said that she intended to work into her sixties. His Honour accepted this as her intention but discounted a term of 35 or 40 years to 25 years for contingencies. The defendant's main complaint on appeal was that a discount to 25 years was insufficient, particularly having regard to her intention of having children and the possibility that, even with her disability, she would obtain part time work.

It is true that, as the defendant's counsel pointed out, the learned trial Judge seems to have thought that the plaintiff said that, but for the accident, she thought she might have had one child at some stage and then return to the workforce; whereas her evidence was to the effect that having children was part of her plan before the accident but that, in consequence of it, she would probably not have more than one because she did not think she could cope. Nevertheless his Honour's discounting in this respect does not appear to have been on the assumption that, but for the accident, the plaintiff would have had only one child. In considering discounting factors he referred to time off work to bear the child or children.

In order to justify a greater discount than his Honour allowed the defendant submitted that, to have children, the plaintiff would probably have taken about five years off work for each childbirth. However an estimate of anything like that length of time was inconsistent with her evidence that she intended to go back to work as soon as it was possible after childbirth and, in view of his Honour's acceptance of that evidence, it must be rejected.

It was not seriously suggested that any substantial discount should be made for the possibility that the plaintiff would obtain part time work. The medical evidence was that her condition would worsen rather than improve with time and there was no basis for thinking that part time work was other than a fairly remote possibility.

For those reasons I do not think that the discount was insufficient or that otherwise his Honour's assessment in this respect was excessive.

(b)         Lost superannuation benefits

This involved much the same argument and for that reason this ground of appeal was

not made out.

(c)         Future gratuitous care

As appears from his Honour's apportionment of damages set out above, $84,500.00 of the total amount of $146,000.00 awarded under this head was for gratuitous services not provided by the defendant and $61,500.00 for gratuitous services of the type now provided by the defendant. The first sum was in respect of services provided by the plaintiff's mother, her mother-in-law and her neighbours.

The estimates of time given by the plaintiff in respect of this help are the reason for this apparently high sum. For example the estimate of time which the neighbours spent in taking her shopping was six hours a week. However she was not challenged on these estimates in cross- examination, there was no other evidence on this question and the learned trial Judge accepted them. They were not so high that he was not entitled to accept them.

The same is true of the estimate of time, 17½ hours per week, which it was said the defendant spent in caring for the plaintiff. Although this seems high it is not so high that, especially in the absence of any challenge, his Honour was not entitled to accept it.

The amount which his Honour awarded under this head followed from his decisions, challenged by the plaintiff's appeal, not to include in the rate at which damages should be calculated the administration charge of the commercial care provider whose evidence he accepted, and that the plaintiff was not entitled to recover in respect of gratuitous services provided by the defendant. As to the latter his Honour said that he was entitled to take into account the substantial risk that the marriage would not last in which event those services presently provided by the defendant would be provided by someone else. This entitlement was also challenged by the defendant. I can see no justification for this challenge but in view of the conclusion which I have reached in respect of the plaintiff's appeal it is unnecessary to consider this question further.

It follows that the defendant's appeal must fail.

2.          The plaintiff's appeal

(a) Gratuitous services rendered by the defendant

As the learned trial Judge noted there is a difference of judicial opinion as to whether a plaintiff may recover damages in respect of gratuitous services rendered or to be rendered in the future by the defendant where the defendant has the benefit of compulsory insurance. The present case concerns future services and the defendant was compulsorily insured.

I do not propose to discuss or even mention all of the cases in which different opinions appear, except to the extent that it is necessary to explain these reasons. Most of them are referred to in two articles by Professor Lunz1 which have been of considerable help to me in reaching the conclusions which I have.

Two policy considerations underlie the principles now governing awards of damages for voluntary care provided to a plaintiff. The first is a desire to compensate the voluntary care giver.2 The second is a desire to ensure that such an award should not, by a requirement that the need for such care is or may be productive of financial loss, diminish the damages to the advantage of the defendant.3 The result is a principle based on need alone, thereby providing a fund for expenditure, at the plaintiff's discretion, on behalf of the care giver.4

Once need alone is seen as a basis for relief the basis on which, if at all, damages should be reduced in respect of care provided either in the past or in the future by the defendant is also reasonably clear. The provision of care by the defendant cannot eliminate the need which arises on causation of the injury. Cases which assert that provision of the care eliminates the loss5 are therefore incorrectly decided based, as they must have been, on the dissenting view of Gibbs J. in Griffiths v. Kerkemeyer6. However it does, to the extent of the value of the care provided, discharge the defendant's liability. Consequently to the extent that care has been provided by the defendant prior to the date on which damages are assessed, the value of that care should go in reduction of those damages.

In Lynch v. Lynch7, which concerned past care, the New South Wales Court of Appeal, whilst apparently accepting that that would be so were "the position not complicated by compulsory insurance" reached a contrary conclusion because of the existence of such insurance. The policy reason which caused their Honours to reach that conclusion appears to have been that "It is the injured plaintiff who suffers. His or her damages are less whenever the provider of the services fortuitously happens to be the defendant."8 But that, in my view, is to ignore the policy reason underlying the principle on which such damages are awarded: to compensate the care giver.

Where the defendant care giver is uninsured, as the court apparently recognised, this policy is satisfied by reducing the damages because the defendant is compensated by that reduction. Where the defendant is insured, including under a compulsory policy pursuant to a statutory scheme, the defendant will, in most cases including this, be entitled to be indemnified by the insurer in respect of voluntary services rendered in reduction of the plaintiff's damages.

Section 3 of the Motor Vehicles Insurance Act 1936 and the statutory policy issued thereunder9 provide, in effect, that the insured is indemnified "against all sums for which he shall become legally liable by way of damages". Those sums must include the sum needed to satisfy the need for care. But because the defendant has provided services which, to the extent of that provision, have discharged his liability to the plaintiff, his right to indemnity from the insured should to that extent, be satisfied by payment to him of the value of those services.10 If that is so then the policy underlying the principle is satisfied in this case also by reducing the damages. It is one thing to say that the plaintiff does not have to show that her need is or may be productive of financial loss. It is quite another to say that the plaintiff should be entitled to recover a sum of money to enable her, if she wishes, to compensate a defendant care giver where that defendant is entitled to recover from his or her insurer the value of the care given. I would therefore disagree with the conclusion reached by the Court of Appeal in Lynch. However that question does not arise in the present case which is concerned with future care.

family member for reasons unassociated with the issue of liability.

The position with respect to future care is quite different. No payment having been made or services rendered in reduction of damages in respect of the need, there is no basis either in principle or policy for reducing the plaintiff's damages. The possibility or probability that a care giver will continue to render care cannot affect the value of the need for it (although it may affect the extent to which that need is or may be productive of economic loss) and will not have discharged, wholly or in part, the defendant's liability for damages payable for satisfaction of that need by the time they come to be assessed. There is therefore no basis for taking that possibility or probability into account.

(b)         The administration fee

The only evidence of the market cost of the services was $12.50 per hour. This was given by a commercial care provider who said that this represented $9.50 for the care given and $3.00 as an administration fee. Notwithstanding the absence of other evidence it is most unlikely that, in a labour market such as the present one in which there is a high level of unemployment, particularly in unskilled labour, unskilled services such as this could not be obtained at the price charged by the commercial care giver before adding its administration charge. I would not therefore be prepared to say that in this case the learned trial Judge was wrong in accepting $9.50 per hour as the reasonable rate for the services which will be provided to the plaintiff in the future.

I would allow the plaintiff's appeal, set aside the judgment and substitute judgment for the plaintiff in the sum of $679,850.00.

The defendant must pay the plaintiff's costs of the defendant's appeal which has been ordered to be dismissed. The defendant must also pay the costs of this appeal by the plaintiff which is allowed.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 196 of 1994 Appeal No. 197 of 1994

Brisbane

Before	Davies J.A. McPherson J.A. Shepherdson J.
[Kars v. Kars]
BETWEEN

REBECCA DAWN KARS

(Plaintiff) Respondent

AND

MARK JOSEPH KARS

(Defendant) Appellant

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered the 8th day of September 1995

I have had the advantage of reading the reasons for judgment of Davies J.A. and

I agree with them. We are bound by Van Gervan v. Fenton (1992) 75 C.L.R. 327 to hold

that the issue of compensation for the cost of caring for the plaintiff in the future is governed

by the needs of the plaintiff unaffected by the possibility that the defendant may be willing,

or even bound, to provide such services gratuitously.

The reasons for judgment of Megaw L.J. in Donnelly v. Joyce [1974] Q.B. 454, 461-

462, contain a passage in which the criterion of need is adopted. In Hunt v. Severs [1994]

2 A.C. 350, 361, Lord Bridge said he did not find the reasoning in that passage convincing. To my mind it is plain from his Lordship's speech (with which the other learned Law Lords

agreed) that Lord Bridge regarded the performance of gratuitous services by the tortfeasor

as going in mitigation of the plaintiff's loss (at 358 C-D), and to that extent as being not

compensable in damages. The case concerned claims for the cost of both past and future

services, but they were treated as being governed by the same principle. On the strength

of that decision, the plaintiff here would be bound to submit to some reduction in the

compensation payable on account of services that would or might be rendered by the

defendant in caring for the plaintiff in the future.

It is, however, clear that in arriving at their decision in Van Gervan v. Fenton, Mason

C.J., Toohey, and McHugh JJ. accepted as correct the very passage from the judgment of

Megaw L.J. in Donnelly v. Joyce which their Lordships rejected in Hunt v. Severs. Subject

to a qualification which is not relevant for present purposes, Brennan J. agreed with the

reasons of Mason C.J., Toohey and McHugh JJ. It follows that we are bound by the

decision of the High Court to hold that there should be no reduction in this element of the

plaintiff's damages for the future on account of the prospect that services will be provided

gratuitously by the defendant tortfeasor himself.

The question in this Court is one of authority and not of logic, convenience, principle

or policy. We are bound by the ratio of Van Gervan v. Fenton, which, it may be noted,

does not appear to have been cited to the House of Lords in Hunt v. Severs [1994] 2 A.C.

350.

I agree with the orders proposed by Davies J.A.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane	Appeal No. 196 of 1994 Appeal No. 197 of 1994
Before Davies J.A.

McPherson J.A. Shepherdson J.

[Kars v. Kars]

BETWEEN

REBECCA DAWN KARS
(Plaintiff)

Respondent

AND

MARK JOSEPH KARS
(Defendant)

Appellant

REASONS FOR JUDGMENT - SHEPHERDSON J.

Judgment delivered on the 8th day of September 1995

I have read the draft reasons for judgment prepared by
Davies J.A. I agree that the defendant's appeal fails and for

the reasons which His Honour has given.

I turn to the plaintiff's cross appeal. I agree with His
Honour's reasons concerning the administration fee and I turn
to the matter of "Gratuitous services rendered by defendant."

The learned trial judge held that as a matter of principle damages for gratuitous services provided by the defendant tort feasor whether in the past or in the future are not recoverable by the plaintiff. He then went on, in case an appellate court should take a contrary view, to assess damages for future gratuitous services presently provided by the husband. His Honour accepted the plaintiff's evidence and that she had present needs which her husband fulfilled and which took him about 17½ hours per week to perform. He calculated the monetary cost at $166.25 per week. He said:-

"If those damages were recoverable in the way in which services provided by people other than the tort feasor were concerned, I would be minded again to apply the same reasoning as I have done in respect of the plaintiff's mother, mother-in-law and neighbours; namely to take a period of 25 years."

His Honour then arrived at a figure of $123,000.00 which, on the 5% tables is approximately the present value of a future weekly loss of $166.25 for 25 years.

His Honour then went on to consider whether or not the
defendant would continue to provide those needs for 25 years.

He said he could not be satisfied that the defendant will

provide those services for as long a period as the 25 years
which he had earlier discussed.

His Honour adopted (as he said) a broad brush or robust approach and halved the $123,000.00. He thus arrived at the component of $61,500.00 which he awarded for damages for future gratuitous services to be provided by persons other than the defendant. I infer from His Honour's reasons that this sum did not include future costs of services presently provided by the plaintiffs mother, mother-in-law and neighbours.

As a matter of principle, the tort feasor defendant in this case should not be ordered to pay compensation for the gratuitous services which he has rendered in the past and which he will render in the future. There are at least two single judge decisions of this Court which support that view.

The first is Gutkin v Gutkin [1983] 2 Qd.R. 764 a decision of Demack J. The second is the decision of Thomas J. in Maan v Westbrook [1993] 2 Qd.R. 267. Apart from these decisions, there are others to like effect including one of the Full Court of the Supreme Court of Tasmania - Motor Accidents' Insurance Board v Pulford [1993] Aust. Torts Rep. 81-235.

Where damages are awarded to a plaintiff for the reasonable value of services rendered to him gratuitously by a member of his family in the provision of nursing care or domestic assistance rendered necessary because of the plaintiff's injuries, those damages are held on trust for the voluntary carer (Hunt v Severs [1994] 2 A.C. 350 at p.363).

If damages were awarded to the plaintiff in respect of services performed by her tort feasor husband, he would be obliged to pay twice. He has already rendered services and as the learned trial judge found will continue to do so for some time into the future. I respectfully adopt the following passage in the judgment of Demack J. in Gutkin v Gutkin, supra (at p. 766):-

"Although plaintiffs who are injured in motor vehicle accidents have their judgments met by insurance funds, those judgments are pronounced upon established legal principles. The fundamental rule in the assessment of damages is expressed in the phrase, restitutio in integrum. I adopt as correct the following passage in Professor Luntz' book at p. 4:-

'However, the consequences of a personal injury are both pecuniary (such as the need to incur medical expenses or the loss of earning capacity) and non-pecuniary (such as pain and suffering and loss of amenities); at least with regard to the pecuniary consequences, the compensatory principle is paramount.'

...

What follows from this principle is that the Court assesses the measure of the plaintiff's loss that has been suffered at the hands of the defendant or the defendants. It seems to me to follow as the night the day that where the defendant has already met some part of the plaintiff's loss by service or by payment, the plaintiff cannot then prove any loss in respect of that item."

I mention the decision of the New South Wales Court of Appeal in Lynch v Lynch [1991] 2 NSWLR 411. That Court held that the Griffiths v Kerkemeyer claim could be sustained although as Professor Fleming later said "the gratuitous assistance to the tort victim had been rendered by the defendant (who happened to be a nurse) rather than by some unimplicated family member." (see the criticism made of that decision by Professor Fleming in a note in the Australian Law Journal (Vol. 66) at pp. 388-9). In Lynch, as Professor Fleming pointed out, recovery was allowed because it was a case where compulsory insurance applied. I agree with Professor Fleming's criticisms. I also agree with the views of Thomas J. given in Maan v. Westbrook for not following Lynch v Lynch.

In my respectful view the learned trial judge was correct to reduce the component for future Griffiths v Kerkemeyer damages for the period during which the tort feasor defendant husband will continue to provide the gratuitous services needed by the plaintiff. I am not prepared to say that his halving of the $123,000.00 is incorrect. I would dismiss the plaintiff's cross appeal and make no order as to costs in respect of the defendant's appeal and the plaintiff's cross appeal.

1

"Voluntary Services Provided by the Defendant" (1994) 2 Torts Law Journal 80; "Voluntary Services

Provided by Defendant: a Postscript" (1994) 2 Torts Law Journal 184.

2

Griffiths v. Kerkemeyer (1977) 139 C.L.R. 161 at 177 per Stephen J.; see also Hunt v. Severs [1994] 2 A.C.

350 at 358.

3

Nguyen v. Nguyen (1990) 169 C.L.R. 245 at 262.

4

Van Gervan v. Fenton (1992) 175 C.L.R. 327.
Such as Gutkin v. Gutkin [1983] 2 Qd.R. 764; and see Maan v. Westbrook [1993] 2 Qd.R. 267.

5
6

At 165.

7

(1991) 25 N.S.W.L.R. 411 at 418-9.

8

At 419.
See now Motor Accident Insurance Act 1994 s.23 and the statutory policy issued thereunder.

9
10

Although reg.14 of the Motor Vehicles Insurance Regulations 1968 (and see now Motor Accident
Insurance Act s.43(1))prohibits an insured from making "any offer, promise, payment, settlement or admission of
liability in respect of any accident", that phrase would not, in my view, include the provision of voluntary care by a