Mott v Fire and All Risks Insurance Co Ltd - [1999] QCA 220

IN THE COURT OF APPEAL 99.220
SUPREME COURT OF QUEENSLAND

Appeal No 11904 of 1998

Brisbane
[Fire & All Risks Insurance Co Ltd v Mott]
BETWEEN:

FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election) Appellant

AND:

ANTHONY MOTT by his next friend KATHLEEN MAY MOTT
(Plaintiff) Respondent
McMurdo P
Pincus JA
Chesterman J

Judgment delivered 15 June 1999
Separate reasons for judgment of each member of the Court, McMurdo P dissenting.
APPEAL ALLOWED AND THE FOLLOWING ORDERS MADE:
(1)SUBJECT TO ORDER (2) THE JUDGMENT ENTERED BELOW IS REDUCED FROM $1,246,314.30 TO $796,314.30;
(2)ACTION REMITTED TO THE TRIAL DIVISION FOR THE PURPOSE OF A REASSESSMENT OF DAMAGES FOR FUTURE CARE AND ASSISTANCE, THE AMOUNT OF WHICH IS, WHEN ASSESSED, TO BE ADDED TO THE SUM OF $796,314.30, THE TOTAL BEING THE FINAL JUDGMENT IN THE ACTION;
(3)NO ORDER AS TO APPELLANT’S COSTS OF THE APPEAL;
(4)INDEMNITY CERTIFICATE PURSUANT TO THE APPEAL COSTS FUND ACT 1973 BE GRANTED TO THE RESPONDENT IN RESPECT OF THE APPEAL.

CATCHWORDS: DAMAGES - GENERAL PRINCIPLES - negligence - personal injuries - whether the 3% or 5% discount tables should be applied to the plaintiff's award of damages for future care.
Gaudry v Pacific Coal Pty Ltd (unreported, Supreme Court of Queensland, Helman J, 9 November 1995), considered.
Griffiths v Kerkemeyer (1977) 139 CLR 161, referred to.
Kars v Kars (1996) 187 CLR 354, considered.
Nguyen v Nguyen (1990) 169 CLR 245, considered.
Todorovic v Waller (1981) 150 CLR 402, considered.
Van Gervan v Fenton (1992) 175 CLR 327), considered.
Supreme Court Act 1995, s 16(1)
Common Law Practice Act 1867, s 5
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - meaning of “damage ... referable ... to a liability to incur expenditure” - Supreme Court Act s 16(1)
Cole v Director-General of Department of Youth and Community Services (1987) 7 NSWLR 541, considered.
Cooper Brookes (Woollongong) Pty Ltd v FCT (1981) 147 CLR 297, considered.
Dallikavak v Minister for Immigration in Ethnic Affairs (1985) 61 ALR 471, referred to.
Hall v Bonnet [1956] SASR 10, considered.
Re Chapman [1896] 1 Ch 323, considered.
Thompson v Goold & Co [1910] AC 409, considered.
Acts Interpretation Act 1954, s 14A
PROCEDURE - COSTS - whether respondent entitled to an indemnity certificate - whether appellant insurer has interest in clarification of the law.
Appeal Costs Fund Act 1973, s 15

Counsel:Mr GW Crooke QC with Mr C Newton for the appellant
Mr R Morton for the respondent

Solicitors:Clayton Utz for the appellant
Murphy Schmidt Solicitors for the respondent

Hearing date: 21 May 1999
IN THE COURT OF APPEAL [1999] QCA
SUPREME COURT OF QUEENSLAND

Appeal No 11904 of 1998

Brisbane
BeforeMcMurdo P
Pincus JA
Chesterman J

[Fire & All Risks Insurance Co Ltd v Mott]
BETWEEN

FIRE AND ALL RISKS INSURANCE CO LTD
A.C.N. 000 327 855
(Defendant by Election) Appellant

AND
ANTHONY MOTT by his next friend KATHLEEN MAY MOTT

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] QCA 220
Decision Date: 15 June 1999

CaseChat Overview and Summary

In the case of Fire and All Risk Insurance Co Ltd v. Mott, the Court of Appeal of the Supreme Court of Queensland addressed a significant legal dispute between the Fire and All Risks Insurance Co Ltd and Anthony Mott. The central issue before the court was whether the statutory provision concerning future liability for expenditure, as outlined in s. 16(1) of the Supreme Court Act 1995, could encompass the Van Gervan component of damages. This component pertains to the recovery of the market cost or value of care or services provided without cost to the injured plaintiff, due to their injury. The case sought to determine if such future liabilities, which do not involve a present or prospective legal obligation to pay, could be considered under the statutory provision.

The court's deliberation involved interpreting the term "liability" in the context of the statute. It was argued that "liability" could be interpreted in a broader sense, as "likelihood," which might include situations where there is no current or future obligation to pay. However, the court held that the statutory language, on an ordinary reading, did not extend to situations where the plaintiff merely asserts that future assistance will be necessary without any associated expenditure. The court was reluctant to stretch the statutory language to include such circumstances, as doing so would go against the ordinary meaning of the words used. Furthermore, the court considered the broader implications of such an interpretation, noting that it would potentially allow for a higher return on investment than what is realistically achievable, which would contradict the purpose of the statute.

The court concluded that the statutory provision in question should not be interpreted to cover the Van Gervan component of damages, as it would require reading the statutory language in a strained manner. The reasoning was influenced by the practical effect of the statute, which is to assess a plaintiff's loss based on the assumption that the awarded sum would produce a net return of five percent after accounting for income tax and inflation. The court found that such an interpretation would not align with the intended purpose of the statute and thus, upheld the narrower interpretation of the term "liability."

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

I have had the advantage of reading the reasons of Chesterman J and, subject to the following observations, agree with them. The essential question is whether the expression "damage that is referable . . . to a liability to incur expenditure in the future" in s. 16(1) of the Supreme Court Act 1995 can cover the Van Gervan component of damages (see Van Gervan v Fenton (1992) 175 CLR 327). In that case it was held that an injured plaintiff could recover the market cost or value of care or services provided without cost to the plaintiff, the need for such care or services having been due to the plaintiff's injury. The expression "liability to incur expenditure in the future" is capable of covering instances in which the plaintiff is neither subject to a present legal obligation to pay money, nor likely to be subject to such an obligation in the future; this is so because the word "liable" can mean "likely". Although the contrary view is open, I prefer the broader construction, reading "liability" as meaning "likelihood". A reason is that the liability Parliament had in mind appears to be one presently existing, at the time the award is made; the expression "in the future" refers to the incurring of expenditure, not to the liability. Further, one would expect that damages related to expected expenditure, without any prior liability, were to be covered - for example, medicine bought for cash. Therefore, in my opinion, the fact that in the Van Gervan situation there is no "liability", in the sense of a legal obligation to pay, does not defeat the appellant's argument.What does so, in my view, is that the liability must be one to incur expenditure; the plaintiff making a Van Gervan claim does not assert that he or she is likely to incur expenditure but merely that it will be necessary for people to give assistance in the future, for no pay. Like Chesterman J , I am of the view that it would be unorthodox for this Court to read the relevant statutory language in such a strained way as to cover circumstances which appear, on any ordinary reading of that language, not to be within its scope. In addition to the reasons his Honour gives for unwillingness to attribute to the words chosen by the legislature the meaning advanced by the appellant, I am influenced by considering the general effect of s 16(1) of the Supreme Court Act 1995. It is to require the relevant part of an injured plaintiff's loss to be assessed on the basis that investment of the sum awarded will ordinarily produce a nett return of five per cent after taking into account income tax, and any decline in the value of money due to inflation. I note that the long term bond rate is presently about six per cent and that investing in that way would not be likely to produce five per cent nett. To accede to the appellant's argument would, as it seems to me, be to treat the respondent as able to make a higher return on investment than is in reality likely to be achieved; of course, if the statute clearly so requires, that must be done.I agree that the orders proposed by Chesterman J should be made.IN THE COURT OF APPEALSUPREME COURT OF QUEENSLANDAppeal No. 11904 of 1998BrisbaneBeforeMcMurdo PPincus JAChesterman J[Fire and All Risk Insurance Co Ltd v. Mott]BETWEEN: FIRE AND ALL RISKS INSURANCE CO LTDA.C.N. 000 327 855(Defendant by Election) AppellantAND:ANTHONY MOTT by his next friend KATHLEEN MAY MOTT(Plaintiff) RespondentREASONS FOR JUDGMENT - CHESTERMAN JJudgment delivered 15 June 1999

Ratio Decidendi

Legal Principle Established

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