Zheng v CAI

The High Court of Australia considered an appeal by the applicant, Ms. Zheng, against a decision of the Court of Appeal of New South Wales. The dispute arose from a motor vehicle accident in which Ms. Zheng sustained personal injuries. The primary issue concerned the assessment of economic loss, specifically whether regular payments made to Ms. Zheng by the Christian Assembly of Sydney ("the Assembly") should be taken into account when calculating her damages. The respondent argued that these payments constituted income derived from her volunteer work, while Ms. Zheng contended they were benevolent payments.

The legal issues before the High Court were whether the Court of Appeal erred in allowing the respondent to succeed on a new case not fully ventilated at trial, and whether the payments received by Ms. Zheng from the Assembly were to be characterised as income or as benevolent payments for the purpose of assessing damages. The Court also considered the relevance of the intention of the giver of such payments and the public policy implications of disregarding them in the assessment of damages.

The High Court reasoned that the Court of Appeal had allowed the respondent to succeed on a basis not presented at trial, which prejudiced the applicant as she had not had the opportunity to adduce evidence or make submissions on that specific point. The Court applied the principles articulated by Windeyer J in *The National Insurance Co of New Zealand Ltd v Espagne*, which distinguish between payments received under contract and those given by way of bounty. The decisive consideration, according to *Espagne*, is the character of the payment, determined by the intent of the giver. The Court found that the Assembly's letter, stating the payments were to enable Ms. Zheng to function more effectively as a volunteer worker, indicated a benevolent intent, meaning the payments were not to be deducted from her damages.

The High Court allowed the appeal, set aside the orders of the Court of Appeal, and reinstated the judgment at trial in favour of the appellant, with costs. The Court ordered that the parties file agreed proposed orders to implement the judgment.