State of New South Wales v Perez

[2013] NSWCA 149

Court of Appeal

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

State of New South Wales v Perez [2013] NSWCA 149

Hearing dates:

9 May 2013

Decision date:

03 June 2013

Before:

Basten JA at [1];
Macfarlan JA at [36];
Ward JA at [42]

Decision:

(1) Allow the appeal and set aside the order of the Tribunal giving judgment for the plaintiff in the sum of $1,318,506.24.

(2) Declare that the respondent is entitled to damages in an amount of $389,774 together with such further sum as may be assessed under s 15B(2) of the Civil Liability Act in respect of the loss of his capacity to provide gratuitous domestic services to his grandchildren.

(3) Direct that, in the absence of agreement or further order, each party bear its or his own costs of the appeal.

(4) Remit the matter to the Dust Diseases Tribunal for consideration of the outstanding claims in respect of the gratuitous domestic services, for determination according to law.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:

WORKERS COMPENSATION - dust diseases - Dust Diseases Tribunal - damages for loss of capacity to provide gratuitous domestic services - s 15B Civil Liability Act 2002 (NSW) - meaning of "that need is reasonable in all the circumstances" - whether "need" refers to the circumstances of the dependant

DAMAGES - s 15B Civil Liability Act 2002 (NSW) - whether error in calculation of damages - damages awarded for domestic services provided by grandfather to grandchildren - where no reduction for services having been provided concurrently with grandmother - where grandmother now provides services

DAMAGES - s 15B Civil Liability Act 2002 (NSW) - whether error in calculation of damages - whether double counting - where grandfather provided care to children of daughter and children of son - where care occasionally provided simultaneously - where damages did not take into account overlap

WORDS AND PHRASES - "that need is reasonable in all the circumstances" - s 15B Civil Liability Act 2002 (NSW)

Legislation Cited:

Civil Liability Act 2002 (NSW), s 15B
Dust Diseases Tribunal Act 1989 (NSW), s 32

Cases Cited:

Amaca Pty Ltd v Novek [2009] NSWCA 50; 9 DDCR 199

Category:

Principal judgment

Parties:

State of New South Wales (Appellant)
Mario Hernan Perez (Respondent)

Representation:

Counsel:

G M Watson SC/G Rundle (Appellant)
D J Russell SC (Respondent)
Solicitors:

I V Knight, Crown Solicitor (Appellant)
Maurice Blackburn Lawyers (Respondent)

File Number(s):

2013/90600

 Decision under appeal 

Jurisdiction:

9115

Date of Decision:

2013-02-26 00:00:00

Before:

Judge Curtis

File Number(s):

DDT 2012/412

Judgment

1. BASTEN JA: The respondent, Mr Mario Hernan Perez, was exposed to asbestos dust and fibre whilst working for the Public Transport Commission of New South Wales at its Chullora bus depot. He has contracted mesothelioma and his prognosis is very poor.

1. Mr Perez claimed damages from the State of New South Wales, which is the entity responsible for liabilities of the Public Transport Commission. Pursuant to an amended statement of claim filed on 10 December 2012, and with the expedition for which it is widely admired, the Dust Diseases Tribunal (Curtis J) delivered judgment on 26 February 2013. (The final material in support of the claim was tendered to the Tribunal on 20 February 2013.)

1. The trial judge awarded a little over $1.3 million, of which a little less than $1 million was an award calculated pursuant to s 15B of the Civil Liability Act 2002 (NSW). It is that 's 15B award' which is the subject of the present appeal. The appeal, brought pursuant to s 32 of the Dust Diseases Tribunal Act 1989 (NSW) is limited to a decision of the Tribunal in point of law.

1. The established heads of compensation for personal injury cover harm suffered by the injured person, including pain and suffering and loss of earning capacity. Section 15B provides for compensation of a different kind, namely for the injured person's loss of capacity to provide gratuitous domestic services to his or her dependants. Although dependants are limited to family members, the entitlement is not limited to a case where the injured person is either morally or legally responsible to provide such services. Further, the proper limits of the entitlement are quite obscure.

1. The notice of appeal originally filed by the State on 25 March 2013 raised a number of grounds, the majority of which did not clearly identify a point of law. However, the appeal was conducted on the basis of an amended notice, filed on 7 May 2013, which focused squarely on the proposition that the trial judge misconstrued s 15B, and in particular s 15B(2)(d).

1. Whilst the construction adopted was undoubtedly available, it gave rise to anomalies, which caused the trial judge significant misgivings. For reasons explained below, there is a preferable construction to that adopted by the trial judge, which should be accepted. It follows that the judgment miscarried in part and the orders must be set aside. The respondent is, however, undoubtedly entitled to an award for his loss of capacity to provide gratuitous domestic services to his wife and grandchildren and, for that reason, it is necessary to remit the matter to the Tribunal. However, it is to be hoped that, given his short life expectancy, and with the guidance of the principles set out below, the parties will be able to come to an accommodation as to the appropriate amount.

Factual background

1. Although the case turns entirely upon a point of statutory construction, it is necessary to outline, by way of background, the factual circumstances which gave rise to the claim.

1. The respondent apparently ceased work at sometime in the 1990s, and provided some domestic services to his wife and, when they arrived, his grandchildren, before his present mesothelioma was diagnosed. The trial judge accepted that his mesothelioma first manifested itself in May 2012: at [4]. That may be treated as the time at which the appellant's liability arose.

1. The respondent's claim was dealt with by reference to three categories of dependants. The first involved his wife, Mrs Marlene Perez. The assistance provided to Mrs Perez, whose health is not good, but whose condition is reasonably stable, should not be affected by the outcome of the appeal. The amount awarded in respect of her was $65,873.64. (Because these figures are the result of mechanical calculation, awards are routinely, and entirely misleadingly, expressed in figures to the nearest cent.)

1. The second category involved two grandchildren of the respondent, now aged four years and 13 years respectively, who were the daughters of the respondent's daughter. She and her husband both worked, she usually on night shift and he on day shift. As the trial judge noted, "[i]n order to accommodate these arrangements the children stay three nights each week with Mr and Mrs Perez who provide fulltime care": at [42]. Mr Perez had in the past been responsible for transporting the older girl to extracurricular activities including gymnastics, art classes and swimming and transporting both girls to and from school. The respondent also assisted the older girl, who has learning difficulties, with homework: [44].

1. The third category, also involving two children, are the respondent's grandchildren by his son's family. They are twin boys born in October 2011. It appears that their mother returned to work in May 2012 (incorrectly identified as May 2011 in the judgment at [79]). The trial judge stated that "Mr and Mrs Perez then attended upon the son's home on three days each week to care for the children between about 8am and 5pm. On occasions they brought with them the other grandchildren. On the other two or three working days, [the children's maternal grandmother attended]": at [79]. After the respondent was no longer able to provide care, their maternal grandmother "took over": at [80]. The children's mother, being pregnant, stopped work at the end of October 2012, giving birth to a third child on 4 January 2013. The trial judge noted that after the respondent's expected death, Mrs Perez would be "free to resume caring for her son's children" when their mother returns to work.

Gratuitous domestic services - s 15B

1. The operative provision in s 15B is sub-s (2), which provides as follows:

15B Damages for loss of capacity to provide domestic services

...

(2) When damages may be awarded

Damages may be awarded to a claimant for any loss of the claimant's capacity to provide gratuitous domestic services to the claimant's dependants, but only if the court is satisfied that:

(a) in the case of any dependants of the claimant of the kind referred to in paragraph (a) of the definition of dependants in subsection (1) - the claimant provided the services to those dependants before the time that the liability in respect of which the claim is made arose, and

(b) the claimant's dependants were not (or will not be) capable of performing the services themselves by reason of their age or physical or mental incapacity, and

(c) there is a reasonable expectation that, but for the injury to which the damages relate, the claimant would have provided the services to the claimant's dependants:

(i) for at least 6 hours per week, and

(ii) for a period of at least 6 consecutive months, and

(d) there will be a need for the services to be provided for those hours per week and that consecutive period of time and that need is reasonable in all the circumstances.

1. The phrase "gratuitous domestic services" is defined to mean "services of a domestic nature for which the person providing the service has not been paid or is not liable to be paid": s 15B(1). There is also a definition of "dependants" which needs to read as a whole to make sense of sub-s (2) and is in the following terms:

dependants, in relation to a claimant, means:

(a) such of the following persons as are wholly or partly dependent on the claimant at the time that the liability in respect of which the claim is made arises:

(i) the husband or wife of the claimant,

(ii) a de facto partner of the claimant,

(iii) a child, grandchild, sibling, uncle, aunt, niece, nephew, parent or grandparent of the claimant (whether derived through subparagraph (i) or (ii), adoption or otherwise),

(iv) any other person who is a member of the claimant's household, and

(b) any unborn child of the claimant (whether derived through paragraph (a) (i) or (ii), adoption or otherwise) at the time that the liability in respect of which the claim is made arises and who is born after that time.

1. There are two aspects of the provisions set out above which give rise to difficulties. First, both in the definition of "gratuitous domestic services" and in sub-s (2)(b), the word "or" is used when one might have expected "and". The use of the disjunctive in sub-s (2)(b) compounds the second difficulty, which arises from shifts between past, present and future tenses. A court assessing damages is apt to think, by reference to the date of trial or judgment, of past losses (which can usually be defined with some precision) and future losses (which are inevitably speculative to a degree). On one view the use of differing tenses could reflect that exercise. However, the preferable reading of sub-s (2) is that it speaks from the date at which the liability arose, as referred to in paragraph (a). The activities of the claimant prior to that time will set the upper limit of what can be claimed, subject to satisfaction of the subsequent paragraphs.

1. The appellant focused on paragraph (d) and, in particular, the requirement that the need be "reasonable in all the circumstances". To describe a need as "reasonable" is to contemplate the possibility that it may be "unreasonable". However, if a need is something which is necessary, it must satisfy a higher test than reasonableness, (unless the phrase "in all the circumstances" was meant to engage an assessment of that which gave rise to the need).

1. The construction proposed by the respondent, and accepted by the trial judge, was that the concept of "need" referred to the circumstances of the dependant who, if a young child, had many objectively ascertainable needs, which could properly be identified without reference to the availability of some person to satisfy them. By contrast, the construction proposed by the appellant was that, in a context involving assessment of the claimant's capacity to provide services to satisfy those needs, the need was to be identified by reference to the services which had in fact been provided (and were otherwise likely to be provided) by the claimant.

1. The disadvantage of the respondent's construction was that it seemed to give little or no work to the phrase "reasonable in all the circumstances". The disadvantage of the appellant's construction was that, despite that phrase apparently qualifying the word "need", it was being used in a broader sense which was not in conformity with the statutory language. There was a point in the oral submissions for the respondent at which his counsel, in seeking to give the language some work, came close to conceding the approach adopted by the appellant.

1. The preferred reading of s 15B should, if possible, give all the words work, without reading in further words or contradicting the apparent sense in which they are used. Further, and importantly in the present circumstances, the provisions referred to above should be read as a whole. Once that is done, it will be seen that the term "need" appears only in paragraph (d): the focus of the operative provisions and the definitions is "services", and in particular services of a domestic nature provided by the claimant.

1. The critical reference to "need" in paragraph (d) focuses upon the specified temporal scope of the services provided. That scope, as identified in paragraph (c), is that the services be provided for at least six hours per week for at least six consecutive months. The phrase "reasonable in all the circumstances" qualifies not the word "need", but the phrase "that need". Read in context, the focus is not merely the need of the dependant, but the time which would have been taken to deliver services in satisfaction of that need. No doubt some service providers will be more efficient than others. There is an evaluative judgment involved which, the paragraph provides, shall be undertaken by reference to the standard of reasonableness and having regard to all relevant circumstances in the particular case. It is thus not merely an abstract quality of the need which is in issue.

1. There is an interrelationship between "need", "services" and dependency. Thus, a dependant is someone who has a need which may be satisfied by the provision of particular services in circumstances which give rise to a relationship of dependency between the dependant and the service provider. Thus, the grandchildren have needs to be fed, cared for and accommodated. However, that does not define the needs in a way relevant to the present statutory purpose. It is possible that a particular child may need more than one person to care for him or her at any given point in time. Further, particular needs may be met concurrently.

1. Before leaving the question of statutory construction, it is convenient to note that paragraph (c) requires an assessment of the time over which services would have been provided "to the claimant's dependants". That appears to involve a cumulative assessment. Thus, babysitting four children over three hours would not involve the provision of services to each child over three hours (giving a total of 12 hours), but rather provision of services to all four dependants over three hours.

Application of principles by Tribunal

1. In a passage which somewhat elliptically appears to cover the conditions in paragraphs (a)-(c), though without reference to factual findings, the trial judge stated at [57]:

"The plaintiff has established that the grandchildren were partly dependent upon him for domestic services before the defendant's liability arose. He has established that those [dependants] were not capable, and will not be capable, of performing the services themselves by reason of their age. He has established that but for his injuries he would have continued to provide the services for at least six hours per week for a period of at least two [sic, six?] consecutive months."

1. He then rejected a contention that the children did not require care whilst asleep, on the basis that they were too young to be left alone at night: at [58]. The trial judge continued:

"59 The only remaining question, posed by s 15B(2)(d), is whether the need for the services is reasonable in all the circumstances.

60 The word reasonable here qualifies only the word need. It does not, as does the common law, impose a requirement that in all the circumstances it be reasonable to replace services at a cost.

61 The need in this case is created by the desire of the children's parents to maximise their income.

62 In Mr Russell's submission [for the plaintiff] if a need so created is reasonable that is the end of the matter. The Tribunal must focus upon the need itself, and ignore the fact that the need is otherwise met in a manner entirely satisfactory to the plaintiff, the children, their parents and Mrs Perez. He submits that because Mr Perez has lost the capacity to provide domestic services to grandchildren in need of those services he is entitled to damages in a sum equivalent to the value of that capacity, and: 'it does not matter how it was replaced, it does not matter if it was replaced.'"

1. Referring to the decision of this Court in Amaca Pty Ltd v Novek [2009] NSWCA 50; 9 DDCR 199, his Honour stated that there was no error in that case in holding that "the need of a child for care created by the desire of parents to work fulltime was a need reasonable in all the circumstances": at [64].

1. These passages are erroneous in a number of respects, based on the analysis set out above. First, in paragraph (d), the phrase "reasonable in all the circumstances" does not qualify the word "need" but the phrase "that need", which, read in context, involves an assessment of the hours over which and the period for which the services were expected to be provided by the claimant. It would be mistaken to assess the "need" of each child for care in some abstract sense. However, there was no finding either that these children had a need for multiple carers, or could be adequately cared for by one person at a time. Nor was there any finding as to whether it would be reasonable in the circumstances for all four grandchildren to be minded together.

1. Secondly, the fact that the need is (presumably now, after the respondent developed his current incapacity) satisfied by others was not irrelevant. On the one hand, that fact may demonstrate the genuineness of the need; on the other, to the extent that it was satisfied by Mrs Perez alone in circumstances in which she and her husband had been jointly responsible in the past, it may call into doubt the need for the respondent's services.

1. Thirdly, it is not clear for what precise proposition reliance was placed on Novek. The passage quoted by Campbell JA in Novek, taken from the trial judgement, was that paragraph (d) required a consideration of "all the circumstances that brought about the need and reasons for the need": at [55]. That is not the language of the statute and could, depending on how it is understood, give rise to quite different questions from those raised by paragraph (d). More importantly, it was wrong to say that the Court "approved" that statement: rather, Campbell JA noted that "[i]t was not contended on the appeal that the correct construction of the provision did not require those circumstances and reasons to be considered": ibid.

1. Although it does not arise in the present case, there is reason to doubt that s 15B(2) requires the trial judge to assess why it was that the claimant was providing services. In some circumstances that question may have relevance to the purpose of the provision, but in many it will not. For example, the fact that grandparents are providing services because the parents, far from acting reasonably, have been delinquent is not a disqualifying factor. As already noted, the entitlement to an award depends on the existence of a relationship of dependency, as a matter of fact rather than legal or moral duty; the preconditions to recovery are that domestic services have been provided gratuitously in the context of such a relationship, together with ongoing needs and expectations.

1. The approach adopted by the Tribunal resulted in erroneous calculations being undertaken. Thus, the Tribunal noted that the daughter's children continued to stay "with Mr and Mrs Perez for three days (72 hours) each week despite the illness of Mr Perez. Mrs Perez attends to their needs. Their father has adjusted his schedules so that he is able on most occasions to drive the children to school". Having assessed the period of school hours at 12, the Tribunal awarded damages calculated on 60 hours of domestic services per week despite, as he noted on more than one occasion, that those services (other than the driving) were now provided entirely by Mrs Perez.

1. Findings that Mr Perez assisted the older girl with her homework and drove her to various activities, as well as driving both children to school, demonstrate that some amount should have been allowed for his incapacity to provide such services in the future. The finding that the services he was providing during the time the two children were at his home, are now provided entirely by Mrs Perez, shows that at least one carer was needed; it does not show that two carers were not needed. Thus, the children may have needs which can reasonably require two carers; however, it is implausible that two carers were needed throughout the 60 hours and that conclusion cannot stand in the absence of specific findings as to the tasks he undertook.

1. There appears to have been an independent error in assessing separately the services provided to the young twins of the respondent's son. As noted above, Mr and Mrs Perez attended at their son's home on two or three days each week for a period of at least eight hours, but on occasions brought the other grandchildren with them. Given that the other grandchildren were in their sole care for three days a week, the probability is that there was more than occasional overlap. However, the respondent was entitled to compensation on an hourly basis for the time he was no longer able to spend providing such services (assuming it was he and not his wife who provided the services), an assessment which did not depend on whether there were two or four grandchildren present. In the absence of findings which would satisfy the Court that there was no double counting, the approach adopted is erroneous and is likely to have overestimated the services in fact provided in the past, pursuant to s 15B(2)(a). The fact that separate service providers may be needed in the future is beside the point in calculating the ceiling imposed by that provision.

1. There was considerable discussion in the course of argument as to whether the role played by Mr Perez was, after his illness developed, taken up by another family member and, if so, whether that demonstrated that there was no relevant "need" for his services. However, the fact that one service provider has been replaced with another may well provide cogent evidence of the "need" for the particular services. The point is rather that if, after he became incapacitated, the services supplied by Mr and Mrs Perez to their son's children were supplied by their son's mother-in-law, a question would arise as to whether the very young twins had previously been dependent on Mrs Perez, rather than Mr Perez. Even if they had been partly dependent on him, the calculation of damages depended on the hours he had spent, but was no longer capable of spending: s 15B(2)(a), (4) and (11)(a).

Conclusions

1. In the result, the appellant is entitled to succeed on the basis that it has established an erroneous approach adopted by the Tribunal, in point of law. Its initial position that the respondent was not entitled to any award on account of gratuitous domestic services, pursuant to s 15B(2), cannot, however, be accepted. The respondent was entitled to an award in respect of the loss of his capacity to provide domestic services to his wife, the calculation of which is no longer challenged, and to his grandchildren.

1. Importantly, and unfortunately, the Tribunal did not make findings of fact which would allow a recalculation to be undertaken. Although it is to be hoped that the parties are able to reach an accommodation as to an appropriate sum, the only course available to this Court is to set aside the orders of the Tribunal, other than the amount which is not in dispute, and remit the matter to the Tribunal for further consideration and determination according to law.

1. The Court should make the following orders:

(1) Allow the appeal and set aside the order of the Tribunal giving judgment for the plaintiff in the sum of $1,318,506.24.

(2) Declare that the respondent is entitled to damages in an amount of $389,774 together with such further sum as may be assessed under s 15B(2) of the Civil Liability Act in respect of the loss of his capacity to provide gratuitous domestic services to his grandchildren.

(3) Direct that, in the absence of agreement or further order, each party bear its or his own costs of the appeal.

(4) Remit the matter to the Dust Diseases Tribunal for consideration of the outstanding claims in respect of the gratuitous domestic services, for determination according to law.

1. MACFARLAN JA: I agree, for the following reasons, with the orders proposed by Basten JA.

1. Section 15B(2)(d) of the Civil Liability Act is the primary focus of this appeal. It is not easily construed.

1. In my view, it cannot sensibly be understood, as the primary judge held it should be, as referring simply to the dependants' needs considered in the abstract. If it were so construed, it would have little, if any, operation because, fortunately, needs of dependants that are satisfied by an injured claimant prior to him or her suffering injury will, after the injury, almost always come to be satisfied by some other means, whether by the assistance of some other relative or friend, or by paid assistance. On this basis, the dependants will not then have any unsatisfied needs that are "reasonable in all the circumstances" and the paragraph will rarely, if ever, be satisfied.

1. Sense can only be given to the paragraph by construing it as referring to the needs of the dependants that would, but for the claimant's injury, have been satisfied by the claimant. In conformity with the provision as so construed, the Court must determine whether the dependants' needs for the services that would have been provided by the claimant are "reasonable in all the circumstances". Thus, to take an obvious example, a child is unlikely to be considered to have a need, that is "reasonable in all the circumstances", for care to be provided by a grandparent claimant if the child lives with his or her parents and the parents are readily available to provide that care. On the other hand, if, by reason of the claimant's injury, another relative has had to give up paid employment to provide services to the dependants, the view may be taken that the dependants have a need for services to be provided by the claimant that is "reasonable in all the circumstances".

1. Support for this construction of the paragraph is to be found in the language of s 15B(2) which refers, in its chapeau, to "any loss of the claimant's capacity to provide gratuitous domestic services to the claimant's dependants". Paragraph (d) speaks of the reasonableness of a need for "the services" to be provided. "The services" are those referred to in the chapeau, that is, those that would have been provided to the dependants by the claimant, not simply those of a type that would have been provided by the claimant, irrespective of who provided them.

1. On this construction, the use in the paragraph of the words "will be" makes sense because, after the claimant's injury is suffered, the dependants may, depending on the circumstances, still have a reasonable need for the claimant's services notwithstanding that they receive substitute services from someone else (see the second example given above).

1. WARD JA: I agree with the reasons of Basten JA and the orders his Honour proposes.

**********

Amendments

18 March 2014 - Correcting references, [77] to [79] and [78] to [80]

Amended paragraphs: [11]

Decision last updated: 18 March 2014